Rent Control, a California Nightmare

The voters of California are set to vote for a new nightmare called statewide rent control, when they go to the ballot box on Election Day on November 6, 2018. On the ballot in California will be Proposition 10, “Local Rent Control Initiative.” If approved, Proposition 10 will allow local governments to adopt any type of rent control system, repealing the Costa-Hawkins Rental Housing Act (CHRHA) of 1995.

The CHRHA is a 1995 state statute that limits the use of rent control in California and provides that cities cannot enact rent control on (a) housing first occupied or built after February 1, 1995, and (b) housing units where the title is separate from connected units, such as condominiums and townhouses. CHRHA also provides that landlords have a right to increase rent prices to market rates when a tenant moves out and this is called “vacancy de-control.” Prior to the enactment of CHRHA, local governments were permitted to enact rent control, provided that landlords would receive just and reasonable returns on their rental properties.