How Investors Are Preparing for Costa Hawkins

Henry Manoucheri

In November, Californian’s will vote on a measure that would repeal 1995 Costa Hawkins Rental Housing Act, which regulates rent control throughout the stay. If the repeal occurs, rent control could be expanded or added to new markets that don’t currently adopt rent control policies. Apartment investors are concerned about the measure, but there are ways to prepare. Universe Holdings, an active apartment investor in Southern California, has been looking at and buying rent control properties in California to hedge against the potential impact of expanded rent control.

“We recently bid on a $200 million asset in Alameda in Northern California, and the reason that we went after that property is that rent control that came into existence in that city two years ago,” Henry Manoucheri, CEO of Universe Holdings, tells GlobeSt.com. We figured that it couldn’t get any worse. In L.A. County where there is rent control, we have bought a number of rent control assets in the last two years believing that if Costa Hawkins did get repealed, it can’t get much worse on an asset that is already under rent control. That is really how we have shielded ourselves.”