Residential Real Estate, Culture, & Lifestyle Consultancy in Los Angeles

Is Los Angeles Rent Control expanding?

Proposition 10 could change everything about the L.A. rental market

Photo by Jose Alonso on Unsplash
Photo by Jose Alonso on Unsplash
I was able to catch up on real estate news this week and headline caught my eye that I feel a lot of people pay attention to, especially in a city like Los Angeles that has a very large population of renters and that is... rent control a topic near and dear to all of our hearts and I think one that we all talk about too, in one way, shape or form, no matter who you are. You can be a renter or a landlord slash property owner and you are going to be paying attention to the rules and guidelines that Los Angeles has for us when it comes to rent control. This upcoming election in November, there is going to be a proposition that is going to impact both groups, renters and owners - Proposition 10.

Proposition 10 is a measure that is going to repeal the 1995 Costa Hawkins Rental Housing Act. And what that Act did is it limited the rent control policies that could be rolled out by any city in California. For example, cities could not say that single family homes or condos would fall under rent control. It prevented that from happening and in some areas even duplexes and triplexes were exempt from rent control. If you pay attention to the laws in Los Angeles, you also are familiar with the rule that any multifamily buildings built after 1978 are exempt from rent control. That's a touchy subject for renters and landlords because renters feel that without rent control there is lots of uncertainty in their outlook of long term housing costs.

For example, if you were to rent something in a newer building, something built after 1978 and you're paying $2,000 a month, once that lease is set to renew, your landlord would have the right to increase rent up to a number they believed is fair market value, which is the term used to say, "this is what this unit should rent for in the market today." That number can exceed three to five percent increases, which outpaces the historical average of annual rent control increases. That can be concerning for people when their housing costs increase by five percent or even 10 percent in some circumstances year over year. You would get priced out of those units. People in Los Angeles are going to be paying very close attention to the vote on Proposition 10.

If this does pass and the Costa Hawkins Housing Act is repealed, then that means cities like Los Angeles will have the right to expand rent control to properties that wouldn't have qualified under this act. That would include condos, single family homes, or units, buildings that were built after 1978. Imagine Los Angeles deciding that properties that previously didn't fall under rent control now falling under rent control. That would be a major shift in the economics of renting and property ownership throughout the city!

I strongly encourage that you vote so that your voice is heard. It's going to be interesting to see what happens with this. There's obviously some very large groups backing both sides. You've got large investment groups, investment firms, and equity firms that have a position against this measure. On the other side are groups that support expanding rent control as they believe it's protecting affordable housing. Hopefully you have an opinion on this and you feel that this is something worth voting on. If you have comments please share them wherever you find this article. We love dialogue and we feel it’s important to hear from you. Thanks for reading!

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