Yes on 10: A Costa-Hawkins Repeal is One Critical Piece of the Puzzle

Pretty much everyone in California – and across the country – knows that we are is in the midst of a housing crisis. Part of the solution is more units being built. But it’s especially important for development to be done at an affordable price for all parties so that the state doesn’t continue to see the statewide gentrification that has been happening. As simple as that may sound, there are rules on development and building that make it difficult for developers to build quickly and efficiently, and others that limit renter protections for the 46% of renting households in California (and 60% in Los Angeles). What is even crazier is that it would take someone making minimum wage in California 93 hours of work per week to afford the average one-bedroom apartment. We believe that rent stabilization will help low-income families.

There is an immediate need to alleviate the pressures of the housing crisis and no single law or regulation will be able to fix the growing issue. However, Proposition 10, or the repeal of Costa-Hawkins, is one tool that can give cities, including Los Angeles, the ability to expand affordable housing options, while also providing protection for renters throughout California. Should rent stabilization be expanded to large housing markets such as here in Los Angeles, there is a better chance for renters to remain in their homes instead of being priced-out. Repealing Costa-Hawkins is one key step in a necessary multi-pronged approach to address the affordable housing crisis Californians are faced with today.

What is Costa-Hawkins, you ask? It’s a law that was put in place in 1995 with four main functions:

  • To establish vacancy decontrol (allowing for a rental unit’s price to change at the landlord’s discretion once a tenant moves out).
  • To not allow rent stabilization for single family units and condominiums, decreasing the supply of housing eligible for rent stabilization.
  • To establish a moratorium on rent stabilized units for anything built after February of 1995.
  • Limit the rent stabilization programs that already existed throughout the state in 15 different cities. These cities include our own City of Los Angeles, as well as Santa Monica, West Hollywood, San Francisco and San Jose.

So what would a repeal of this do? As a basic function, the repeal will allow for cities and counties to either create or expand on rent stabilization ordinances if they so choose. It will not establish rent stabilization or rent control, it will only let municipalities do it if they want to. By providing local municipalities with the power to create their own program, residents and other individuals have more voice in influencing how these policies are written and enacted. Through this, residents gain agency within their cities and are provided better opportunities to build the city for themselves, instead of being left out as they have been in the past.

But this isn’t all good. It is possible for this kind of autonomy to become detrimental to the growth of housing stock through the implementation of extreme limitations. For example, with the repeal, cities can put into place rent stabilizations that tailor to the calls of constituents who may not want any new housing development in their community (i.e. NIMBYs) by allowing only for a fraction of a percent cost increase each year – ultimately deterring the ability for landlords to be profitable, and, in-turn, limiting the construction of new units. This issue brings us back to the point that rent stabilization is only one component of a system of needed policies. It must be coupled with a robust set of policies aimed at building inclusivity. Some measures for inclusivity and equity include income requirements and thresholds to allow for occupying a rent stabilized unit – meaning priority for low-income tenants, and incentives for landlords to manage rent stabilized units.

Ultimately, Prop 10 empowers municipalities to use a Rent Stabilization Ordinance to support low-income tenants and build out policies that will aid in the fight against displacement and for housing for all. We believe that cities should have the tools necessary to protect against escalating rents. We encourage you to vote #Yeson10, and if we haven’t convinced you yet, we wrote up an in-depth analysis of what opponents, supporters, economists, and researchers say about rent stabilization, as well as why we think it is best to repeal Costa-Hawkins. You can find that here. Check back later this week for a one-pager that compiles all of the key information about Prop 10 into one sheet. As always, if you have any questions or feel there is some information that should be added, please reach out. We welcome and encourage productive conversations on issues that will affect us all.