Costa Hawkins Repeal Flounders in Committee

Early on January 11 tenants and homeless activists from all over California converged on the Capitol building in Sacramento with high hopes and coffee cups in hand. After a year waiting to be heard, a repeal of Costa Hawkins would finally be publicly debated in the Housing Committee, offering a glimmer of hope that rent control might become a possibility in California cities. But that hope was smothered when the legislation failed to move out of committee, with Democrats Ed Chau and Jim Wood joining Republicans Marc Steinworth and Steven Choi in failing to support cities’ rights to make their own decisions about rent control.


In the 1970s, tenants primarily in communities of color organized to pass rent control laws in cities around the country. But the industry organized in response. Costa Hawkins was passed in 1995, making rent control illegal in any new units built in California and prohibiting cities from continuing rent control on units once they change tenancy. This means that the pool of rent-controlled units is dwindling as no new units are being protected and more and more units are losing their protection. But rent control is absolutely critical to the survival of poor and working class communities in cities like San Francisco, where according to a report by the Anti-Displacement Coalition there are 2.6 times as many rent controlled units in San Francisco as all other affordable housing units combined.


“Rent control is one of the most successful things we’ve come up with to keep housing affordable, and to keep communities housed all over the country,” said Deepa Varma, executive director of the San Francisco Tenants Union. “We are seeing an upswing in momentum, in organizing that we have not seen for decades in California, or maybe ever.”


But landlords and property management companies also came out in droves to fight the Costa Hawkins repeal effort, which has the potential to cut into their profits by protecting tenants from skyrocketing rents and keeping long-term renters in their homes. The main argument advanced by the opposition was that rent control would disincentivize the construction of new housing, construction that they argue would drive down rents in the long run.


In reality, rent control has not stopped construction in any jurisdiction where it has been tried. Housing activists also argue that if rent control laws were passed in cities, the only way a landlord could charge market rent would be to construct new apartment buildings, which would encourage more construction of units.


Beyond the question of whether or not rent control stymies development is the question of who deserves to be housed. The clear answer for tenants’ rights groups is that people who have lived in their units for a long time have contributed to building social networks and communities that are worth preserving and defending. Because landlords can charge higher rents to new tenants, they are incentivized to push older, long-term tenants out, creating instability within social networks that those tenants have helped create. Tenants who are displaced are at higher risk of ending up in substandard living situations, compromising their basic needs, experiencing anxiety and depression or becoming homeless.


Costa Hawkins remains in place for now, but new campaigns are brewing around the state, with whispers of a potential ballot measure or a return to Sacramento. The real estate industry will fight hard to keep the prohibition on rent control in place, but as more and more tenants become destabilized due to the housing crisis, the movement for rent control will just keep growing.