09 May Costa Hawkins – Why Owners Should Fight to Save It

By MW Real Estate Group

There’s no denying that rent control is one of the most contentious issues in California right now and efforts are currently underway to expand rent control across the state by repealing Costa Hawkins.

What Is Costa Hawkins?

Enacted in 1995, the Costa Hawkins Rent Control Act has been a major asset for owners in California because it effectively places certain limits on rent control ordinances or proposals like what we’re seeing right now across the state.

Thanks to Costa Hawkins owners are able to raise the rent for their single-family home, condo, townhome or unit in their multi-family rental property once their tenant moves out.

Costa Hawkins also stops cities from capping the rent or establishing rent control on units or properties that were built after 1995.

How Would A Costa Hawkins Repeal Affect Owners?

Let’s say that Costa Hawkins is repealed, the Big question is how would its repeal affect owners?

For starters, repealing Costa Hawkins would give cities more flexibility to enact rent control ordinances and owners would be adversely affected because they would no longer have the ability to raise rents to market rates after their tenants move out.

Repealing Costa Hawkins would further stagnate rental markets across California because more owners would be apprehensive about building new rentals here for fear that those rentals would be subject to rent control.

Rent control would also raise city budgets across the state as more systems and bureaucracies would need to be implemented just to oversee rent-controlled units.

For example – In 1996, the City of Santa Monica’s rent control board had an annual budget of $4 million dollars for just managing 28,000 units. (Source – http://savecostahawkins.org/)

How Would Repealing Costa Hawkins Affect Renters?

Repealing Costa Hawkins and allowing rent control measures in California to pass would erode the quality of life for renters in some areas because the owners of those rental properties may not have enough revenue to maintain them.

Rent control would also affect home values and because there would be less tax revenue coming in from owners it would jeopardize the quality of schools and affect public services like the fire department as well.

Protect Your Rental Property Investment

To learn more about Costa Hawkins, or for professional property management in Southern California, contact MW Real Estate Group today by calling us at (213) 927-2117 or click here to connect with us online.