In the latest rental market news, lawmakers in California are seeking to pressure Governor Gavin Newsome to suspend Costa Hawkins, the 1995 Rental Housing Act.
How? There is currently a new bill on the November 2020 ballot called the Rental Affordability Act which seeks to expand rent control in California but the sponsors of this bill have stated that they will withdraw it “in the spirit of cooperation” if the Governor suspends Costa Hawkins.
Costa Hawkins Has Been Under Fire Since Day One
The latest attack on Costa Hawkins is nothing new in California considering that the law has literally been under fire since the day that it was passed back in 1995.
As recently as November 2018, a bill titled the Affordable Housing Act sought to suspend Costa Hawkins, but it was defeated by voters.
With COVID-19 leaving a major impact on California’s economy, and rental market, millions of people in the state are now unemployed so it’s easy to see why Costa Hawkins is in the sights of lawmakers.
There’s no doubt that the state faces hard choices since there potentially are millions of renters who won’t be able to pay their rents in the months ahead but is suspending Costa Hawkins the answer?
State-wide rent control was already passed into law last year when the Governor signed AB 1482, a law that caps limits rent increases at 5% per year plus inflation until January 2030, but most politicians in the state feel that California isn’t doing enough to protect renters.
As we get closer to November 2020, momentum will continue to build in support of the Rental Affordability Act and unless Governor Newsom suspends Costa Hawkins, we can expect this bill to be on the ballot for the November 2020 election.
The best thing that voters in California can do is to educate themselves on the perils of pushing for more rent control in the state because eliminating Costa Hawkins, or passing the Rental Affordability Act, will only produce dire economic consequences in California that will last for years to come.
Even though the rental market in California needs massive change, the key to that change isn’t rent control.
What most people who support rent control measures don’t know is that rent control has a history of failure in every state that it’s been implemented.
Any time rent control is passed, supply always dries up and builders will not build more rental units because they are turned away by price controls.
California has a supply and demand problem that will not improve until more rentals are built state wide to meet the demand of renters.
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