Why Should You As A Rent-Controlled Tenant Care if Landlords Can Set Rent to Whatever They Want After You Leave?
By Aser G. Tolentino, Esq.
On November 5, 2024, California voters will once again be asked whether the 1995 Costa Hawkins Act should be repealed. This question was presented in 2018 and 2020. The fact that the legislature has twice addressed the same topic, enacting state-wide rent control in 2019 and creating more serious penalties to promote enforcement in 2024, might lead someone unfamiliar with the big picture to ask why such a move would be necessary. The answer is subtle but vitally important, it removes a very juicy incentive to cheat.
Enacted in 1995, the so-called Costa Hawkins Act is a provision within the civil code that prevents local governments from limiting how much a landlord can raise the rent on a single-family home, or how much they can charge a new tenant for rent after the previous tenant departs. Suppose that John has lived in his home for twenty years, and has continued to pay increased rent every year at a rate of 5% each year for twenty years. If his rent started at $1,000.00, the second year, his rent would be $1050.00. The third year, it would be $1,102.50. By the twentieth year, it would be $2,653.30. If the law were changed before he moved out and Jim moved in, then the rent would only go up another 5%. But under the current law, the landlord could charge whatever they wanted. This usually leads to two very different schools of thought on whether this is how things should be.
While acknowledging the landlord’s interest to do as they please with their property, affordable housing advocates point out that when owners elect to enter a regulated market, they choose to play by its rules, the same way as power plant operators or airlines for example. To carry the analogy further, it would be like if airlines had to keep offering flights on a certain route at a certain price until demand dropped, they might only fly that route at 2AM until no one flew on it and it could be shut down. Proponents of repeal would argue that the law as written encourages landlords to take worse care of renters with older tenancies in hopes that the tenants will simply give up and move along. Prior to powerful anti-harassment and tenant protection ordinances like those passed in Oakland, Los Angeles, San Diego, and elsewhere in recent years, and the additions to the civil code effective April 1, 2024 thanks to SB567, such behavior by the landlord could often create situations where tenants’ were fully aware their rights had been violated, but could find that no economical way existed to hold the landlord accountable that would make sense given how much time and effort it would take. This would allow landlords to quietly circumvent tenant protections, ironically by being worse landlords. Removing the ability to reset rent would eliminate this perverse incentive.
For their part, landlords would question whether the rate at which they are able to increase rent would be enough to create a meaningful profit for those offering homes for rent. With the high costs of managing properties on top of mortgages, construction, and ongoing upkeep expenses, landlords essentially warn that further regulation could simply break the math that makes the system work as well as it does.
This is not an easy problem to solve. At Tenant Law Group, however, tenant rights attorneys are working hard every day to work for their clients and renters around the state to make things right one broken promise at a time. If you feel your landlord has been using inadequate maintenance to force you out of your home, reach out and find out what our team can do for you.
