This June, California voters should consider approving the repeal to the 1995 Costa-Hawkins Rental Housing Act, an act that places unfair limits on a city’s ability to enact rent control policy and worsens California’s housing crisis.
The 1995 Costa-Hawkins Rental Housing Act prevents strict rent control policy by giving landlords the power to “establish the initial and all subsequent rental rates for a dwelling or a unit” if the building’s occupancy certificate was issued after February 1, 1995. This means that for the majority of buildings constructed after 1995, landlords can increase monthly rates as they please.
What this means, unfortunately, is that an apartment housing complex in an attractive state like California can become quickly unaffordable in a short period of time. In fact, California is home to nine of the U.S.’s ten most unaffordable metropolitan areas.
If an apartment complex in Los Angeles primarily serves low-income people (usually people of color), they might find it impossible to rent from the same neighborhood in two or three years. This sets the base for gentrification, or the arrival of wealthier people at the expensive of current residents, and eventually leads to displacement.
If there was a way for individuals to protect themselves from raising rental rates, then perhaps state intervention like rent control policy would be unnecessary. But often, there’s nothing a person can do when a city becomes randomly alluring and they are “priced out.” This can either be due to the entrance or expanding of an institution, like Instagram, University of Chicago housing, and Whole Foods or as a result of spillover effects from a nearby growing city.
This is essentially what happened to Jimmy Meijia and Patty Garrido, who described to NPR how they were priced out of their home in South Los Angeles. Previously, they paid $1600 for an apartment relatively close to the University of Southern California. But after their landlord sold the complex to another company and issued eviction notices to the occupants, they were forced to look for another home.
While looking for a new apartment, they noticed that the market had drastically changed. The cheapest option they could find was priced at $3800 a month. They needed to either move farther out from Los Angeles, where they work in the middle of the city, or find a way to pay $2000 more for rent. And because of the barriers against rent control that the 1995 Costa-Hawkins Rental Housing imposes, there’s little the Los Angeles government can do to ensure events like this do not happen. And it would be foolish to think that similar events don’t occur closer to us, in Santa Barbara, Goleta, and even in Isla Vista.
One of the biggest contributions to the housing crisis is the skyrocketing prices of houses, apartments, and units. Since cities are unable to devise ways to regulate pricing, California has been enduring a serious housing crisis. Currently, California has one-fifth of the nation’s homeless population which is only “continuing to grow,” according to City Lab’s research.
In Los Angeles, the number of homeless people increased by 13,000 last year. Even smaller, less attractive areas like Sacramento saw an increase of 1,000. A study by Zillow found that 2,000 more people in Los Angeles could become homeless if rent was to increase by merely 5 percent.
Repealing the 1995 Costa-Hawkins Acts allows cities to formulate their own rent-control policy to solve these issues, if they decide to do so.
Opponents of rent control often claim it inhibits development. But let’s be clear, the issue is not always one of scarcity. It’s usually one of distribution. For every one homeless person, there are nearly four empty properties in Oakland where many people are priced out of their homes.
The next question: what’s the point of new development if it’ll be similarly priced to already too expensive units on the market? Opponents argue that as more units come into the market, the supply will outnumber the demand. Thus, prices will decrease.
But as mentioned before, the supply sometimes already outnumbers the demand, as is the case with Oakland. So more development is not necessarily the answer although it may be in a city’s interest to build more units.
There is a such thing as careless, ineffective rent control policy, just as any well-intentioned policy can be. But repealing the Costa-Hawkins Act forces no mandatory rent control policy in its place. Rather, it gives us another method of tackling California’s housing crisis. Voters should vote to repeal the act and put rent control as a strategy back on the table as it gives more power back to cities to decide how to make housing more affordable.