This article was posted on Friday, Sep 01, 2023

The below letter was sent out by Attorney Michael Millman.

Dear Friends:

Although every tenant activist affirms and agrees that upon the completion and passing of a comprehensive statewide rent control law, (AB 1482), there would be no further challenge or attack on the “protections” secured by the 1995 Costa-Hawkins Fair Housing Act. It appears that the author of the ballot measure, Michael Weinstein, was not secure or comfortable with this arrangement. 

He’s Failed Before!

Propositions 10 and 21 were both defeated as a result of millions of dollars spent by our industry to reveal the truth about the destructive nature of rent control.  Many of you contributed to that campaign.  They both were an effort to extend extreme Berkeley-type rent control to every municipality and, of course, force single family units, ADUs, condominiums and newly constructed units to not be considered exempt from rent control.

They were both defeated.  Most California voters do not appreciate or want extensive government regulations and particularly, those dealing with their home, vacation home or rental property.

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Vacancy Control

AB 1482 and the original Costa-Hawkins bill made it unlawful and prohibited any municipality from setting or determining rents when a unit became available or vacant.  This is called vacancy decontrol.  Our friend, Wes Wellman, a prominent realtor in Santa Monica, explains that vacancy decontrol will be attacked as a mechanism for addressing the homeless crisis.  Many of you will be called upon to argue and debate the 2024 ballot measure.

So let me help you.  Please explain to everyone that without the protections of Costa-Hawkins:

  • You will not be able to increase rent upon a vacancy.  This will apply to your accessory dwelling unit, and now your home – including any bedroom you may rent.  
  • It will completely destroy short-term vacation rental opportunities.  
  • Next, the exemption enjoyed by new construction, single family homes and condos will, of course, be subject to restrictive local rent control.

In the local municipalities, when a unit becomes vacant, some bureaucrat, probably selected by a corrupt patronage system or may be a distant cousin or nephew of a council member, the Mayor or someone else, will now set the new rent for the vacant unit.  He or she can do this without any legal restriction. They may decide that there are emergency circumstances and, to that extent, there may be no rental increase whatsoever or another “free rent” deal for the renters.

Detrimental to California’s Housing Crisis

  • If a rental owner cannot lawfully increase rents upon a vacancy, then they cannot maintain the units and the common areas. They will have to terminate their business and sell to a developer.  
  • As we discussed, the removal of the Costa-Hawkins protections will ultimately give rise to unelected bureaucrats with unrestricted powers to add housing fees, additional costs, and, of course, they will manipulate the new rental value on a vacant unit.
  • All of my friends who have properties in California will now fall under the over-restrictive, aggressive rent control.  My friend, Dan Faller, (Founder of the Apartment Owners Association of California, Inc. – AOA), has built several new units in Boise and there’s good reasons other investors will follow.  Why not?  It’s a lot more profitable and enjoyable.  I believe that Idaho state law makes any kind of rent control illegal!
  • Developers, who used to be exempt from rent control, and even exempt under AB 1482 for 15 years, will now lose that protection and exemption.  Those same developers will find a willing government in Austin, Texas, Nevada, Arizona, New Mexico and of course, Florida.  

Final Analysis

In the final analysis, this measure will worsen California’s housing crisis and with no fair or reasonable profit foreseeable, landlords will simply choose to go out of business or move to another state to provide housing for people who appreciate it.  

In 2024, Santa Monicans for Renters’ Rights, the Socialist/Democratic party and Abundant Housing in Los Angeles will all deceptively create the “image” or “impression” that the homeless crisis can be resolved by passing the “Justice for Renters Act” which is, in itself THE BIG LIE.  Just read Economics 101 which states that they will just be increasing our housing shortage!

Assar Lindbeck, a Swedish economist who chaired the Nobel prize committee for many years, reportedly declared that rent control is “the best way to destroy a city, other than bombing.”

The United States government, Rand Corporation, Stanford University and other studies confirm that 75% of the unhoused living on our streets are a product of either being psychotic, sociopathic or some other emotional or psychological disease.  Further, they generally have some dependency on alcohol and drugs.  Most of them are associated with criminal enterprises.  There is no survey and/or study that suggests or confirms that a high percentage of people in homeless encampments arrived at that status because somehow, their rent was too high.

Thank you for allowing me to set out in a concise fashion our positions, analysis and talking points.

AOA Request – Save Your Apartments!

You can help stop it again!  AOA, along with the rest of the industry, once before stopped two other propositions. We can do it again if we all join together and do not “depend on the other guy to do our job”.

You are now being asked to do your part and donate $1,000 or at least $100 for each unit that you own to the AOA Political Action Committee. Please realize that this is a continuing battle, and we must defeat them one battle at a time in order to win this war or be totally destroyed!

Please send your “Save My Apartments!” donation to the AOA Political Action Committee, 6445 Sepulveda Blvd., Van Nuys, CA, 91411. Please, do it today and thank you!

Michael Millman is an attorney and a Mar Vista activist and can be reached at (310) 477-1201.