C.A.R. Opposes Measure to Expand Rent Control

C.A.R. Opposes Measure to Expand Rent Control
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C.A.R. opposes AB 1506 (Bloom, Bonta and Chiu), which repeals C.A.R.’s co-sponsored Costa-Hawkins Rental Housing Act in its entirety.  Costa-Hawkins was enacted in 1995 in response to unchecked local rent control ordinances. Costa-Hawkins places limits on how and when local governments may impose rent control ordinances and specifically prohibits rent control from being placed on condos and single-family homes. AB 1506 would allow rent control to be enacted without limitation, discouraging the creation of rental housing and impairing housing affordability. AB 1506 will be considered by the Assembly Housing and Community Development Committee on Thursday, January 11th. Your Assembly Member is a member of that committee.

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Assemblyman Jim Wood

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"Hi, this is (insert your name). I'm a constituent and a REALTOR®. Please ask my legislator to OPPOSE AB 1506 because it discourages the building of rental housing.”

Costa-Hawkins gives landlords the authority to establish initial rent upon a unit’s voluntary vacancy by the prior tenant, exempts single-family homes and condos, and prohibits rent control on all new construction. If Costa-Hawkins is repealed, cities and counties in California could adopt rent control measures without limitation.

History has demonstrated that rent control does more h¬¬¬¬arm than good. Affordability in rent control municipalities such as Berkeley, San Francisco and Los Angeles has not improved. In fact, affordability is worse in these jurisdictions, and the lack of supply is clearly the driving force behind why rental housing prices continue to climb. AB 1506 would be devastating to California’s ongoing housing crisis and would have very serious and harmful consequences to our economy.

• It Repeals the Rent Control Exemption for Single-Family Homes and Condos - AB 1506 would expand rent control to single-family homes and condominiums, discouraging rental property owners from continuing to offer properties for rent.
• It Discourages New Housing Construction - New housing development would come to a standstill.  In a recent report, the Legislative Analyst concluded that “rent control will do nothing to increase our supply of affordable housing and, in fact, likely would discourage new construction.”
• It Targets Family Owned-and-Operated Small Businesses - The majority of California’s rental units are located within small properties (16 units or less) and are owned by “mom and pop” landlords who depend on these properties for their retirement.
• It Provides NIMBYs a New Tool - AB 1506 is a dream come true for NIMBY (Not In My Backyard) advocates, who want to stop new housing development in California. In fact, one of the same proponents of the prospective companion ballot measure also sponsored a Los Angeles ballot measure last year to stop ALL housing construction in the city.
• It Hurts Low-Income Individuals & Families - Rent-controlled units are NOT means tested. Numerous studies have shown that, while rent control seeks to help low-income tenants, gentrification in strict rent control cities occurs, resulting in more renters with higher incomes after the implementation of these ordinances. According to the Legislative Analyst, rent control would continue to “benefit the more affluent renters.”
• It Lowers the Number of Available Rental Units - Not only would AB 1506 halt new housing construction, it would also result in a loss of rental units throughout the State. Cities with stringent forms of rent control, such as San Francisco and Santa Monica, have lost large numbers of rental units because of rent control. Rental property owners convert their housing to another use – owner-occupied, tenancies in common – or keep their units off the market altogether.  

For More Information
Please contact Julie Tran at juliet@car.org.