Without Costa-Hawkins, many existing landlords, including seniors whose retirements hinge on their rental income, will face the burdens of extreme rent control and exit the rental housing business. Those who sell will likely lose equity, as rent control reduces values on affected properties by up to 20 percent.
Carlton said, “As an organization that represents rental property owners, CAA does not want to see a reduction in rental housing, but when rent control becomes too extreme, getting out of the business is an option that is chosen by some owners, and CAA will continue to defend that right.”
If extreme rent control is permitted, cities without rent control today are more likely to adopt the policy – and in its most radical form. Communities throughout California would face unworkable rent regulations like those imposed on San Francisco and Santa Monica in the 1980s.
The California Apartment Association and its allies explained that repealing Costa-Hawkins would worsen California’s housing crisis.
Debra Carlton, CAA’s senior vice president of public affairs, said returning extreme forms of rent control to California would reduce the existing stock of rental housing, increase rents in neighboring communities, and increase blight and homelessness. In her testimony, Carlton pointed to findings from California’s Legislative Analyst’s Office and studies on rent control.
“We’ve all seen news reports that tell us soaring housing costs have led thousands of people to leave California,” Carlton said. “This will continue even if this initiative passes. While existing tenants may experience lower rents, it will be harder to find vacant units for new employees and students.”
Too often, veterans returning from service also struggle to find housing, L.J. Plass of AMVETS pointed out in the Californians for Responsible Housing news release.
“This measure would make a bad problem even worse, and make it even more difficult for our service men and women to find an affordable place to live in our state,” , said Plass, 3rd vice commander of legislation and state legislative chair, AMVETS Department of California.
In reality, returning extreme forms of rent control to California would bring construction of rental housing to a halt while driving many existing landlords out of the rental housing market. It would worsen California’s housing shortage and make it more expensive for most renters in the state.
UC Berkeley Professor Ken Rosen offered his take in today’s press release from Californians For Responsible Housing.
“We’ve made it very difficult to build new housing, and wages have not kept pace with the rising cost of home prices and rents, which has grown into a crisis,” said Rosen, chairman of the Fisher Center for Real Estate and Urban Economics at Berkeley’s Haas School of Business. “This measure could limit much-needed investment in new housing construction and exacerbate our current crisis.”
I actually think rent control will eventually increase house prices. There will be no more rental supply available for the new engineers moving in. They will be gouged and pay for whatever rentals they can find. This should make them really desperate to buy any property for sale. The only rental supply may be people who bought a 3/4BR house and are renting out the remaining rooms–almost certainly these rooms will be free of rent control.
I worry rent control could really cripple SV. If the rental supply shrinks so much that it costs a few grand a month just to rent a bedroom in someone’s house, no one may be willing to make the sacrifice in QoL to move here.
Finally, it dawn upon everybody that rent control will lead to increasingly high rent and prices through time. Any short term weakness because of newly introduced rent control policy is a buy.
Increasing price might be true. How do you get an increasingly high rent? Maybe at 60% of CPI annual increase, rent is indeed increasingly high technically
Yeah, they are talking about vacancy tax because they understand that at certain point in time. rent will become so low that it’s not worth the hassle of landlording
It might be a good idea to own rental properties in Navada, Utah and Arizona, but rent a house in BA and rent control the new landlord who bought from us to death.
Even for homeowners, you can do this
Sell your permary home to a new investor. Lease back from the new buyer and become a permanent tenant with rent control and vacancy control.
Buy 10 rentals in Salt Lake City and collect rent without th hassle of rent control.
Go FIRE with a rent controlled California RBA home and 10 uncontrolled rental income stream.