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The Costa–Hawkins Rental Housing Act ("Costa–Hawkins") is a California state law, enacted in 1995, which places limits on municipal rent control ordinances. Costa–Hawkins preempts the field in two major ways. First, it prohibits cities from establishing rent control over certain kinds of residential units, e.g., single-family dwellings and condominiums, and newly constructed apartment units; these are deemed exempt. Second, it prohibits "vacancy control", also called "strict" rent control. The legislation was sponsored by Democratic Senator Jim Costa and Republican Assemblymember Phil Hawkins. If an apartment was under "vacancy control", the city rent control ordinance worked to deny or limit an owner's ability to increase its rent to new tenants, even in cases where the prior tenant voluntarily vacated the apartment or was evicted for a 'just cause' (such as failure to pay rent). Costa–Hawkins changed this by allowing an apartment owner the right to rent the vacancy at any price (i.e., usually the market price). In 2019, the California legislature passed and the governor signed AB 1482, which created a statewide rent cap for the next 10 years. The Tenant Protection Act of 2019 caps annual rent increases at 5% plus regional inflation. For example, had the bill been in effect in 2019, rent increases in Los Angeles would have been capped at 8.3%, and in San Francisco at 9%. The increases are pegged to the rental rate as of March 15, 2019. The new law does not apply to buildings built within the prior 15 years, or to single-family homes (unless owned by corporations or institutional investors). It also includes a requirement to show "just cause" for evictions, and retains "vacancy decontrol", meaning that rents can increase to market rate between tenants. Many municipalities in California continue to have their own rent control laws, which remain intact under AB 1482. This ability of city governments is limited by the federal and state constitutions, as well as federal and state laws. Costa–Hawkins is one of the most prominent state statutes limiting the power of California cities to regulate their rental markets. Factors causing 1970s rent control The late 1970s saw the second wave of rent control ordinances in California, and nationwide. Rising real estate values and surging interest rates made single family homes in California less affordable. Disappointed buyers often moved into apartments. A rental housing shortage appeared, rents went up. For chiefly non-housing reasons (e.g., land use), cities began restricting the building of new dwelling units. As prices rose for rental housing properties, return on investment and cash flow motivated new landlords with mortgages to raise rents. State and federal low-income housing assistance fell. Inflation was economy-wide, yet wages and salaries also fell. The consumer movement and Proposition 13 effects then stimulated tenant activism in municipal politics. The Costa–Hawkins legislation of 1995 Political events leading to the Act In 1972 Berkeley became the first California city to adopt a second-wave rent control ordinance. In 1976 Governor Jerry Brown, a Democrat, vetoed state legislation (AB 3788) that would have preempted local rent control laws. It had been supported by a mainstream real estate group, the California Housing Council (CHC). In response to the veto, the real estate industry managed to get an initiative, Proposition 10, on the state ballot for 1980. It was soundly defeated, however, 65% to 35%. In the meantime, in June 1978 Proposition 13 had been approved two to one by California voters. Before the election Howard Jarvis, the leader of the Prop. 13 'taxpayer revolt', as well as of the California Apartment Association, had suggested that landlords would lower rents if Prop. 13 passed. Many voters were said to have thought that Prop. 13, by lowering landlord property taxes, meant lower rents. The CHC, fearful of a tenant backlash if landlords failed to follow through, decided to oppose Prop. 13. Despite post-election efforts by Gov. Brown and the CHC, few landlords lowered their rents. Across California urban tenants formed numerous local groups, which quickly grew in intensity and strength. Tenant activists organized political agitation directed at state and city government. Gov. Brown's new 'tenant hot line' was getting 12,000 calls a day. "In response to tenant pressure, rent strikes, and steady news coverage about rent increases and angry tenants, especially seniors, the Los Angeles City Council passed a six month rent freeze in August 1978." By 1988, fourteen cities had adopted full rent control, and sixty-four cities rent control for mobile home parks. The strength of the tenants groups, however, eventually began to dissipate. Yet CHC attempts to partially 'preempt' rent control were thwarted by Democrats, led by State Senator David Roberti, until term limits forced his retirement in 1995. On the other hand, Democrat Jim Costa in the Assembly had unsuccessfully carried 'preemption' bills for the real estate industry since 1983. He was now in the Senate, where his 1995 bill passed the Judiciary Committee; absent Roberti, it drew Democratic votes. The bill then passed the Senate with one vote "more than the majority required." The Act: sponsors, and opposition The Costa–Hawkins Rental Housing Act became law in 1995. The statute became codified as Civil Code, §§ 1954.50 to 1954.535. The legislation's sponsors were Democratic Senator Jim Costa (Fresno) and Republican Assemblymember Phil Hawkins (Bellflower). Introduced first in the Senate, the text of the legislation later became Assembly Bill 1164. After enduring several negotiated changes, it had passed in both chambers. The Republican Governor Pete Wilson then signed AB 1164 into law. Although understood as limiting rent control, an agenda more favored by Republicans, some Democrats supported the Act. The pro-tenant Western Center on Law and Poverty (WCLP) had endorsed several features of the Bill that served tenant interests: the prohibition of rent increases "if serious health, safety, fire, or building code violations were discovered and not corrected for six months," and some claims by subtenants to lower rent under an existing tenancy. The WCLP, however, was against the bill. Especially it sought to organize the opposition, to "piece together a coalition" of scattered local groups (tenants, senior citizens, religion affiliated), together with the California cities with rent control. Accordingly, Santa Monica, Berkeley, and West Hollywood contributed funds to hire a lobbyist. A concession (obtained by negotiation with proponents of the bill) was the 3-year phase-in of 'vacancy decontrol'. Yet the capitol consensus was that Costa–Hawkins was a "done deal" and the opposition a "last gasp". The passage of Costa Hawkins into law was seen as a rollback of some tenant advantages. Rent control advocates became uneasy at the challenge to their vi.... Discover the Nils Rosenquest Attorney popular books. Find the top 100 most popular Nils Rosenquest Attorney books.