A new piece of legislation introduced in Sacramento could significantly expand rent control to single family homes and new construction.
SB 466 was introduced by Sen. Aisha Wahab in February of this year and would alter the Costa-Hawkins Rental Housing Act that stipulates how rent control rules are applied in local jurisdictions. While elements of the bill have momentum, experts said a wholesale revision to the rules will be difficult given entrenched interests.
As it stands today, Santa Monica’s rent control rules apply only to multi-unit housing and to units built prior to the adoption of rent control in 1979. The revisions proposed by SB 466 would extend rent control to single-family-homes and condos while changing the threshold from a fixed point in time (locally, pre-1979) to a rolling date that brings all construction into rent control after 15 years.
“Reforms to Costa-Hawkins in the state legislature are going to be a very difficult conversation. Everyone involved in that bill is realistic about its prospects given the expected opposition from landlord groups and the Realtors, but that part of the conversation [the rolling date] seems to be one that has the most sort of currency,” said Brian Agusta the Rent Control Board’s Legislative Advocate during a briefing on what to expect in 2023.
He said the idea of a rolling date didn’t amount to the sky falling as the 15-year timeline already exists in other kinds of rent rules.
“Because we’ve been living with, in every rent control jurisdiction, a sort of frozen-in-time picture of when units are or aren’t on the new construction line, so this would create a rolling date, which was a feature of prior attempts at the statewide ballot as well to amend Costa-Hawkins,” he said.
Those past attempts to revise or outright repeal Costa-Hawkins failed.
“Obviously, that’s an enormously important proposal. We’ll see how far we get, most proposals that have looked at touching Costa-Hawkins have not gotten past the first committee. So, I don’t know what we can expect or if we can expect something different this year, we’ll see,” he said.
A past iteration of the Rent Control Board backed a state ballot measure in 2018 that would have repealed most of Costa Hawkins’ restrictions on rent control and current boardmembers said the new proposal had merit.
“I know you said it’s always going to be a difficult change and I’ve always thought that the rolling construction exemption has always made sense. That seems like such an easy fix to do and makes sense. And I know if that would happen for us it would involve thousands of units in the city of Santa Monica that would become under rent control jurisdiction,” said Boardmember Lonnie Guinn.
The bills author, Senator Aisha Wahab has a history of advocating for stronger tenant protections dating back to her time as a councilwoman in Hayward.
“As a renter, former Hayward City Councilmember, and current State Senator, I understand the scope of how the restrictions of a nearly 30-year-old law inhibit local jurisdictions’ ability to meet the demands of their communities amidst an ongoing housing and homelessness crisis,” she said. “With the reforms to Costa Hawkins, as proposed in SB 466, we are simply opening up the toolbox for cities and counties who are doing their best to keep their residents housed and tackle the affordability crisis.”
If the law were to pass, Santa Monica voters would need to approve a change to the city charter to incorporate any changes.
The Costa-Hawkins debate is not the only legislative issue coming down the pike.
“Many bills have been introduced, not all of them are in a permanent form and hearings have just started … The message on spending with respect to housing and housing affordability is we’re going to need to do more with less,” Agusta said.
He indicated that the state’s budget picture would have an impact on any housing proposals. In January, Governor Gavin Newsom gave his projection of the year’s budget and that will be updated in May, based on April tax receipts.
“Last year, we had a record surplus, the result was a lot of new ideas and investments … and now this year we are having a $24-25 billion projected deficit. But it may mean a number of things that funding was provided for in last year’s budget … may get clawed back or be reprogrammed,” Agusta said. “So, that does have an impact on housing,” he added.