For decades, California’s housing policies have balanced rental limits with landlord freedoms, largely thanks to the Costa-Hawkins Rental Housing Act. Enacted nearly 30 years ago, Costa-Hawkins restricts cities from applying rent control to certain properties—specifically, single-family homes and apartments built after 1995. Additionally, it allows landlords to set rental rates freely when a new tenant moves in, regardless of local rent control measures.
In November 2024, Proposition 33 was proposed to change this landscape by granting cities the power to expand rent control to a wider range of housing, including single-family homes and newer apartment buildings, and impose limits on rent increases for new tenants. However, Proposition 33 was defeated in the ballot, meaning the current protections under Costa-Hawkins remain intact. This outcome keeps the limits on rent control for certain properties, leaving landlords free to set their rates for new tenants and protecting single-family homes and post-1995 apartments from local rent control ordinances.
Why Was Rent Control Reform on the Ballot?
As of now, nearly 30% of California renters spend more than half of their income on housing, a burden exceeded only by Florida and Louisiana. Housing affordability has reached a crisis point, and tenant advocacy groups have long argued that Costa-Hawkins’ protections are insufficient in a state with skyrocketing rent prices. These advocates have fought for years to repeal or reform Costa-Hawkins, but their efforts have largely been unsuccessful.
In response to this ongoing issue, Governor Gavin Newsom signed a statewide law in 2019 that limits annual rent increases to 5% plus inflation, with a cap of 10%. However, supporters of Proposition 33 believed this did not go far enough in providing protections to tenants facing steep rent hikes, particularly in areas with tight rental markets.
What’s at Stake for California Landlords and Tenants?
While the defeat of Proposition 33 leaves the current rent control framework in place, the ongoing debate about rent control continues to affect both landlords and tenants. Supporters of Proposition 33 believed it would offer more comprehensive protections for renters, especially those dealing with escalating housing costs. On the other hand, landlord associations and real estate groups strongly opposed the measure, arguing that expanded rent control could discourage investment in new housing and exacerbate the state’s housing shortage. These groups also warned that stricter rent control could lead to reduced property values and rental availability.
Though Proposition 33 did not pass, its defeat has not silenced the broader conversation about housing affordability and the balance between landlord rights and tenant protections. As California continues to grapple with its housing crisis, further debates and legislative actions on rent control are likely in the future.
Key Points to Remember:
- Costa-Hawkins Act limits rent control on single-family homes and post-1995 apartments.
- Proposition 33 was defeated, meaning the current rent control framework remains unchanged.
- Tenant advocates continue to call for more comprehensive protections due to rising rent burdens.
- Landlords and real estate groups are concerned that expanding rent control could harm the housing market and reduce investment.
As California continues to face housing affordability challenges, rent control remains a central issue in the debate over the future of the state’s housing policies.
Disclaimer: The above information is for reference purposes only and does not constitute legal advice. Ease CRE is not a law firm; please consult a qualified attorney for legal guidance. For further assistance, contact us at (714) 886-9281 or visit Ease-cre.com.
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