State bill aims to keep rent in rent-controlled units low—even after tenants move out

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State Assemblymember Richard Bloom has introduced a bill that would allow cities to make it illegal for the owners of rent-controlled buildings to hike rents after tenants move out.

The bill would repeal the state’s Costa-Hawkins Act, which allows the owners of rent-controlled buildings to raise rents to market-rate prices when tenants voluntarily leave or are evicted.

About 118,000 units—or about 85 percent of the rental housing stock—in the city of Los Angeles are rent-controlled. That figure does not including those in Santa Monica, West Hollywood, Beverly Hills, and other cities in the area with rent control laws.

Prior to the act going into effect in 1999, some cities—including Santa Monica—required landlords to preserve rent-controlled prices even after units changed occupants

If Costa-Hawkins is repealed, it would also allow cities to require residential developers to incorporate affordable units into their new buildings.

In 2009, a state appellate court struck down a Los Angeles city ordinance requiring developers to include affordable units in many new apartment buildings. The court sided with notorious Downtown developer Geoff Palmer, who argued that under the Costa-Hawkins Act, the city could not dictate what rents he charged.

The ruling effectively invalidated similar affordable housing mandates, called inclusionary zoning requirements, in other California cities.

In 2013, the state legislature passed a new bill that would have allowed local governments to reintroduce such policies, but it was ultimately vetoed by Governor Jerry Brown.

In rejecting the bill, Brown said inclusionary zoning could make it hard for cities to promote development in lower income areas.

“Requiring developers to build below-market units can exacerbate these challenges,” he wrote, “even while not meaningfully increasing the amount of affordable housing in a given community.”

Proponents of inclusionary zoning policies have argued that they help to foster mixed-income neighborhoods and prevent displacement.

Times have certainly changed since the Costa-Hawkins Act was passed. As Santa Monica Next points out, the year before it went into effect, 60 percent of Santa Monica rentals were affordable to low and moderate income households. By 2013, that number had fallen to just 32 percent. Meanwhile, between 400 and 550 rent-controlled units in the city make the jump to market rate each year.

Bloom’s bill was co-authored by Senator Ben Allen, who also represents Santa Monica, and was introduced by Bloom, along with assemblymembers David Chiu and Rob Bonta—both representatives in the Bay Area.

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