Our united organizations have continued our fight against Assembly member David Chiu’s assault on the California housing supply through his AB 1482 statewide rent and property control legislation. Our lobbyists have worked to implement changes to the proposed law, with limited success. For example, the original version exempted some small properties that are owner-occupied and owned by a “natural person.” This sneaky language excludes most of our properties, which we hold, for tax purposes, in family trusts or limited liability corporations.
Chiu did relent and allowed single-family rental homes held in trusts and LLCs to be exempt. In our weekly legislative conference calls with lobbyists and our state affiliates, we and others from the most restricted cities have been vocal about not withdrawing our adamant objections to this horrible bill, which is still moving through the legislature in Sacramento. Our lobbyists are meeting with the Governor’s Office. We repeat: any city that wants rent control can implement it. There is absolutely no need for statewide rent control; the idea is just plain stupid!
With recent changes on the Supreme Court, and its Knick decision, we’ve been pondering the possibility of challenging rent control at the federal level. In 2012, we joined a coalition of owners in rent-controlled jurisdictions to explore taking a rent-control case through the federal courts.
We hired a distinguished attorney, now a federal judge, to analyze the situation. Her report offered some hope of successfully challenging some aspects of rent control, but a gloomy outlook for a total overthrow, in part, we opined, because the various levels of government would then be forced to subsidize the housing costs of low-income renters whom we now subsidize.
In the short term—that is, NOW—we must focus our resources on the very costly battle we face on the 2020 California ballot: the renewed attempt by Michael Weinstein to repeal the Costa-Hawkins Rental Housing Act, one of the laws that provides a little stability to our rental businesses. “Son of Prop. 10” is slightly different from his first attempt, but just as harmful. This is the time we should be preparing ourselves to contribute cash and volunteer time to again defeat what California voters rejected last year by a wide margin.
Finally, a tiny bit of good news: Several members asked about our recent editorial where I mentioned neighbors who faced paying many thousands of dollars to a long-term tenant so that they could move into their own home. Just as the negotiations were getting tense, and their attorney made the tenant a final take-it-or-leave-it offer, the tenant suddenly changed her mind and decided to leave with only the amount required by the OMI section of the Rent Ordinance.
The owner said that throughout the months-long negotiations she repeated a Hawaiian prayer. She credits it with saving her sanity (and a whole lot of money!) Amen. Whatever works.
Statewide Rent Control: The Battle Continues
AB 1482 statewide rent control measure is still alive. While Prop. 10, the Costa-Hawkins repeal measure, was defeated decisively in last November’s election, AB 1482, which would restrict rent increases and prevent eviction of tenants without just cause, passed out of its first State Senate committee hearing. That signals a win for tenant advocates, who have been trying to push a package of housing-related bills through the legislature. This, plus tenant advocates’ vow to collect enough signatures to bring a new Prop. 10 to a vote in the November 2020 election, means that their efforts to chip away at Costa-Hawkins and institute statewide rent control are far from over.
Reprinted with permission of the Small Property Owners of San Francisco Institute (SPOSFI) News. For more information on becoming a member of SPOSFI or to send a tax-deductible donation, please visit their website at www.smallprop.org or call (415) 647-2419.