28 Sep What Is Proposition 21? Learn More About The Latest Effort To Expand Rent Control In California
Partial rent control in California has been active for close to one year now thanks to the passage of AB 1482 but for some lawmakers this bill didn’t do enough to protect tenants and this is why Proposition 21 is on the November ballot.
If passed by voters, Proposition 21 would enact rent control on all housing that was first occupied 15 years ago. This bill would also effectively replace 1995’s Costa-Hawkins Act, the law that’s stopped rent control from being enacted on all housing across California.
For some, Costa Hawkins is a symbol for what’s wrong with the rental market in California, while for others this landmark piece of legislation has made it possible for landlords to survive in California since it’s enabled them to increase rents in line with market rates over the years.
Will Proposition 21 Pass?
Thanks to a recent LA Times poll, we know that just 37% of likely voters support Proposition 21 and with a few weeks left until election day the chances of this bill passing are slim but that could change in the coming weeks.
The last time that lawmakers made a move to enact statewide rent control was 2018 when lawmakers tried unsuccessfully (59% of voters rejected it) to pass Proposition 10, a rent control measure that would have allowed lawmakers to enact rent control on any type of rental housing.
What’s Next For California’s Rental Market?
2020 will be remembered as one of the toughest years for California’s rental market because of Covid-19 and the economic impact that it’s left on the state.
Thanks to a recent extension of the state’s eviction moratorium, no tenant can be evicted before February 1st, 2021 but tenants must still pay 25% of their monthly rent and they will eventually have to pay the back rent that they owe as well.
With the end of the eviction moratorium now only four months away, the State of California faces an eviction cliff, and possible foreclosure crisis, unless the Federal or State Government can stop either crisis from occurring.
When you combine a possible eviction and foreclosure crisis, along with billions in uncollected rent, this places California’s rental market in the most precarious position than it’s ever been in.
Like most landlords and property managers in California, we hope that Proposition 21 will not be approved by voters this November since it would add another layer of complexity to the states challenging rental market.
Contact MW Real Estate Group
For more information about Proposition 21, or to speak with us about our property management services, contact us today by calling (213) 927-2117 or click here to connect with us online.