Sacramento sets back Santa Monica state reps’ bid to expand rent control

By Gary Walker

Santa Monica’s state representative are pushing for greater local control over rent control laws

Rent control advocates are regrouping after suffering defeat in their first attempt to repeal a 1995 state law that they believe has exacerbated both the homeless and housing affordability crises.

Legislation offered by Assemblyman Richard Bloom and state Sen. Ben Allen, both of them Democrats from Santa Monica, would have rescinded the Costa-Hawkins Act, which keeps cities from expanding local rent control ordinances to cover newer buildings. The bill died Jan. 12 in the Assembly Housing and Community Development Committee, with three Democrats in favor, two Republicans against and two Democrats choosing not to vote. It needed four votes to advance.

“Repealing Costa-Hawkins will not lead to rent control statewide. Local governments will be able to make those decisions on their own,” Bloom argued during the hearing, describing the bill as an attempt to mitigate the one-two punch of stagnant wages and increasing rents. “I needn’t remind you that California has one-fifth of the nation’s homeless population.”

But it isn’t just state lawmakers who are wary of letting local jurisdictions tinker with rental housing prices. Some experts argue that rent control helped create the housing affordability crisis, especially in San Francisco, by limiting the production of new housing despite population growth.

“Rent control never, never works,” said Chris Manning, a professor of real estate at Loyola Marymount University’s College of Business Administration. “It actually makes the problem worse. Developers need incentives to build more housing.”

Voters may soon get their say. The Los Angeles-based AIDS Healthcare Foundation is pursuing a statewide ballot initiative to repeal Costa-Hawkins as early as Nov. 6.

Elena Popp of the Los Angeles-based Eviction Defense Network, which is backing the ballot measure, said failing to expand rent control would result in more homeless on the streets of Los Angeles.

“There are studies that tell us that this is happening. It shouldn’t take a rocket scientist to see the connection [between higher rents and homelessness],” said Popp, who testified at the hearing.

Assembly Housing and Community Development Committee Chairman David Chiu (D- San Francisco) said constituents have urged him to help repeal Costa-Hawkins.

“We don’t just have a housing crisis. We have a tenant crisis,” Chiu told the committee. “Tenants are paying as much as one-third of their income for housing in San Francisco,” where the median monthly rent for a one-bedroom apartment has climbed to $3,400.

Chiu, Mark Stone (D- Santa Cruz) and Rob Bonta (D- Alameda) voted for the repeal; Marc Steinorth (R- Rancho Cucamonga) and Steven Choi (R- Irvine) voted against; and Ed Chau (D- Monterey Park) and James Wood (D- Healdsburg) did not attend.

LMU’s Manning likes the idea of local control, but believes repealing Costa-Hawkins would immediately destabilize housing production.

“If they ever repeal it, then developers will not trust any new provision that lawmakers put in place in two or three years,” Manning predicted.

“If cities are permitted to impose rent control on new construction, investors are certain to abandon plans to build in California,” echoes a statement on the Apartment Owners Association of Los Angeles’ website. “Building more housing decreases market pressures and helps moderate rent prices.”

But the status quo is also untenable, Bloom and Allen argue.

“Despite the recent vote on Costa-Hawkins, the issue of housing affordability will persist and grow. Those facing displacement need our help now,” Bloom said. “Going forward, I remain committed to aggressively attacking all aspects of California’s housing crisis.”

“It’s becoming increasingly difficult for people trying to afford to live and stay in our communities, and that impacts our quality of life and long-tern economic health,” said Allen. “If we are going to adequately address our housing crisis, the Legislature needs to consider creative solutions — including thinking about how we might empower local communities.”