Rent control in California Costa-Hawkins Rental Housing Act

1 rent control in california

1.1 legal context

1.1.1 declared purposes
1.1.2 constitutional limits


1.2 usual provisions

1.2.1 rental amount
1.2.2 other elements


1.3 opposition rent control
1.4 list of california cities

1.4.1 rent control ordinances
1.4.2 elements of rent control
1.4.3 refused rent control

rent control in california
legal context
declared purposes

rent control city-made law (municipal ordinance) aimed @ mitigating disruptive effect, on neighborhoods , on individual renters, of escalating or fluctuating prices in residential rental market. may seek promote maintenance of safe , habitable dwelling units during housing shortages.

an example of such city intent san francisco s residential rent stabilization , arbitration ordinance (sfro), enacted in 1979 emergency ordinance amending san francisco administrative code. found that, in face of tight markets , significant rental increases prior rent control, tenants attempt pay requested rent increases, consequence must expend less on other necessities of life. situation has had detrimental effect on substantial numbers of renters in city, creating hardships on senior citizens, persons on fixed incomes , low , moderate income households .

constitutional limits

a site of supreme court on s. spring st. in los angeles.

for california state assembly analyst stephen holloway commented on constitutional , legal context of rent control, between state , local governments (e.g., cities). when costa-hawkins enacted, existing

california law made no statutory provision for, not prohibit, adoption of local rent control ordinances. case law, birkenfeld v. city of berkeley (1976) 17 cal. 3d 129, held rent control proper exercise of local government s police power if reasonably calculated eliminate excessive rents , @ same time provide landlords , reasonable returns on properties.

in 1997 kavanau case, rental property owner challenged city of santa monica s rent control law form of taking or inverse condemnation prohibited federal constitution. california supreme court affirmed rulings lower state courts in favor of city. in 2005 berger foundation case, california court of appeal upheld ordinance provided city council sitting rent board determine fair, just, , reasonable regarding owner s comparable return on investment. ordinance did not establish specific formula or procedure apply when faced requested rent increase, instead stated eleven factors consider. here board had relied on expert s opinion.

usual provisions
rental amount

often chief provision regulates dollar amount charged tenant each month. primary intent of rent control limit owner s ability raise rent.

percentage. maximum permitted price increase may expressed percentage of existing rent. example, alameda 5%, hayward 5%, los angeles 3%, los gatos 5%. in 2016 san jose lowered allowable annual rent increase 8% 5% of existing rent. in 2017 in beverly hills emergency ordinance rent raise maximum plunged 10% 3%.

us cpi 1913 (in blue), percentage annual change (in red)

cpi. or rent raise limits may directly keyed changes in cost of living, measured consumer price index (cpi). since 1980 in california cpi has been lower 5%. examples of rent control ordinances using cpi index: oakland, mountain view, richmond. in san francisco sfro limits annual increases lesser of 60% of cpi or 7% of existing rent. similarly, berkeley rent board allows annual increase of 65% of cpi.

vacancy control, in amount of rent charged rental strictly regulated local government, discussed below in initial effects of costa-hawkins .

other elements

among issues municipal rent control ordinance might address:

additional exclusions,
rent mediation boards,
condition of premises,
rent registries,
no-cause terminations,
relocation allowance.

no-cause terminations. no-cause (or no-fault) rental termination owner 1 not state cause (such non-payment of rent, or tenant-created nuisance). city may require form of cause owner terminate. no cause required of evictions under state law. other justifications may constitute cause : (a) pursuant government order; (b) allow owner s family occupy unit.

relocation allowance. city ordinance may require owner pay departing tenant allowance moving , similar expenses, e.g., in event of no-fault termination. each city has own specifics. tenant not receive such allowance in event of cause terminations, tenant @ fault (such non-payment of rent, or creating nuisance). owner s decision end existing tenancy (whether notice or eviction) without tenant being @ fault, might trigger duty pay allowance. withdrawal of unit residential rental market governed ellis act.

vacancy control. discussed below @ initial effects of costa-hawkins .

opposition rent control

generally economists find fault how rent control works on time: reduces supply of housing. in making opposition argument, such general principles have been applied california.

original rent control efforts sought provide public affordable housing, caused fall in number of new units being built, aggravating housing shortage. subsequent rent control laws exempted new construction. yet such regulation removes incentives improve, or maintain, older housing stock. encourages owners convert rentals condos sale or other uses. rent control laws provide short-term benefits without distinction: relief low-income citizens, windfall wealthy renters. in dwelling units municipal controls have set rent below market, tenants stay longer, reducing number of rentals available. market rents charged new tenants go higher: (a) owners counterbalance rent-control losses, or (b) builders of new units price market demand versus supply. in brief, rent control reduces housing supply.

economic conclusions subject interpretation public. rent control can translate higher rent others. deemed added benefits favored people in rent controlled units cancelled program s combined detriment welfare of whole community of renters? there alternative? authors of recent stanford paper state, if society desires provide social insurance against rent increases, more desirable offer subsidy in form of government subsidy or tax credit.

list of california cities

over last fifty years, out of total of 482 california cities, perhaps two-dozen have enacted rent control ordinances, or lesser laws. city may later discontinue rent control, e.g., santa rosa voted repeal new rent control law.

with rent control ordinances

santa monica: ocean avenue

fifteen cities listed rent controlled state of california: yet 3 of theses cities not listed here, further below: campbell (does not have rent control per se, offers mediation service), fremont (rejected rent control in 2017), , thousand oaks (has limited rent control-only mobile home parks).

the remaining twelve: berkeley, beverly hills, east palo alto, hayward, los angeles, los gatos, oakland, palm springs, san francisco, san jose, santa monica, west hollywood.

in addition, 3 cities not listed above have rent control: alameda, mountain view, richmond.

with elements of rent control

some cities have element(s) of rent control, including these 6 (two control mobile homes, , 4 offer mediation service): campbell, cotati, gardena, san leandro, thousand oaks, union city.

which refused rent control

recently, 4 cities either voted repeal rent control ordinance, or otherwise declined it: fremont, glendale, palo alto, santa rosa. during years 1977 1983, voters of 22 cities [rejected] 27 proposed rent control initiatives. among cities avoiding rent control: pasadena (1977), santa barbara (1978), santa cruz (1979), long beach (1980), san diego (1980).