11
Jan

Is The Potential Repeal of the Costa-Hawkins Bill Going to Impact You?

The Costa-Hawkins Rental Housing Act of 1995 is a state law that places limits on municipal rent control limits (wikipedia). The main benefit of this bill for rental property owners in cities like Los Angeles, Santa Monica, West Hollywood, and Beverly Hills is something called “Vacancy Decontrol”. Vacancy decontrol allows a property owner to raise rents on a vacant unit to market rent without restrictions. In the bad old days of rent control prior to the Costa-Hawkins Bill, an owner was limited on how much he or she could raise rents, even if the tenant voluntarily gave up a unit. With the recent explosion of rental prices, tenant rights groups and many politicians want to repeal this bill and give authority to cities to permanently control rents of all properties.

Imagine if you had low paying tenant for years that you inherited when you bought your building. Being a responsible and ethical landlord, you just accepted it knowing that at some point he would move and you could get market rent for your building. Lets say because of his age he finally went to live with a family member. Well if the Costa Hawkins Act is repealed, it might be possible that you could NOT legally raise the rent on that unit even though gave it up voluntarily. This must be stopped. I am, not a fan of rent control but at least currently an owner can bring rents to market if a tenant voluntarily gives up an apartment.

By the time you read this, the legislature will be voting on this. I will update this blog after the vote.