In 1995, the Costa-Hawkins Rental Act was passed. It outlawed stealth or illegal roommates. It provided that when a rental unit became vacant, the owner may, at their discretion, re-rent the unit at prevailing market rates. Further, it exempted single-family homes, ADUs Condominiums, new construction and retail commercial units from any form of rent control.
In 2019, this law was amended to protect new construction up to the first 15 years and provide a rental cap as well as protect all tenants from arbitrary evictions – The Tenant Protection Act: AB 1482.
Prop. 33 Represents a Threat to Rental Housing:
- Would eliminate the right to charge fair market rent for new move-in tenant candidates.
- Would permit local authorities to establish a huge rent control bureau which would hire hundreds of evaluators, inspectors and others.
- Extreme rent control as promoted would allow the new rent control bureau to “roll back” current rents to prices and values unrealistically
- Would extend rent control to single-family homes, condominiums, commercial/retail, duplexes, ADUs and, of course, newly constructed rental housing.
- Would destroy the “incentive” for developers to provide very low income or moderate housing because California would appear to be over-regulated and then the protections of Proposition 13 would also fall thereafter.
- Would allow local rent bureaus to mandate and insist that every tenant, without the consent or approval of the owner, could install roommates and others while also including no restrictions on the breed, type or number of household pets.
- Would prohibit any owner from arranging with a tenant for the payment of water, sewage and trash.
- Would mandate, without tenant contribution, seismic earthquake retrofit programs, and the repair and restoration of stairs and balconies.
Conclusion
This means that not only would there be no incentive to build low-income housing in California, but “intrinsic” values of rental stock would probably be diminished by a factor of 40% or more.
VOTE NO ON PROP. 33!