Year of Elections
Potential vacancy control and passthrough restrictions are looming.
Strict Rent and Vacancy Control on the November Ballot
This November, California voters will vote on a measure that could decimate the construction of new affordable housing, repeal protections for property owners that are more than two decades old, and open the door for extreme rent control measures across California.
The measure, dubbed the California Housing Freeze, would repeal a 1995 Costa-Hawkins Rental Housing Act—a bipartisan measure that created statewide guidelines for the kind of rent control policies cities are able to impose. Specifically, Costa-Hawkins prevents cities from capping rent on units built after February 1995 (in San Francisco, after 1979) or on single-family homes or condominiums. The law allows landlords to adjust rents to market rates on a unit when tenants move out, though the rent is again frozen at the adjusted rate when a new tenant moves into the unit.
But if this new initiative becomes law, cities will be free to impose “vacancy control.” That means landlords would be unable to raise rents on certain properties even after a tenant moves out. It would also vastly expand cities’ power to implement rent controls by allowing them to cap rents on single-family homes and condominiums.
The Costa-Hawkins Repeal is being bankrolled by activist Michael Weinstein, a Hollywood-based anti-housing crusader who has an extensive history of fighting against new housing and opposing renters. He has spent more than $2 million to put this initiative on the ballot and will likely spend millions more to pass it.
In 2016, Weinstein backed an anti- housing initiative known as Measure S in Los Angeles, which would have imposed a housing moratorium in one of California’s most impacted and expensive housing markets. The Los Angeles Times editorial board said, “Measure S is likely to increase evictions and the loss of rent controlled housing” and “will result in a loss of rent-stabilized housing.”
California is in the middle of a housing crisis, and we need to take action. But Weinstein’s Costa-Hawkins Repeal will make the crisis worse. It will reduce the overall amount of middle class and affordable housing in California and raise prices for everyone.
This initiative does nothing to protect affordable housing. In fact, by making construction of affordable housing more difficult, this measure could hurt veterans, the elderly, and low-income families —the people who need the most help with finding affordable housing.
This measure will do exactly the opposite of what it promises—instead of helping people, it will result in less housing and higher costs. Independent academic experts from Stanford and UC Berkeley agree these policies will reduce the construction and availability of affordable housing, which will drive up rents for many Californians.
Affordable housing construction is already under pressure since the elimination of state redevelopment funds, which accounted for up to 30 percent of funding toward affordable housing. The full impact of this elimination is just starting to be felt. The Housing Freeze would make it even less likely that affordable housing developers can confidently pencil out these projects.
Instead, the Costa-Hawkins Repeal takes a radical approach that will make it even harder for California to build the thousands of new units needed to help keep pace with its growing population and help address the skyrocketing cost of housing in communities across the state.
If the Weinstein Housing Freeze is approved by voters, it would allow local governments wide latitude to impose any rent control measures they see fit. That could potentially include expanding limits to rents on single-family homes, and implementing “vacancy control” ordinances, which would cap increases on rental units even after a tenant has moved out.
We invite you to visit NoHousingFreeze.org and join the campaign. For more on Costa Hawkins, see “Repeal and Regret” on page 14 and “Saving Costa-Hawkins” on page 16.
The above content was provided by Debra Carlton, the senior vice president of the California Apartment Association.
New Restrictions on Passthroughs
New legislation, written by Supervisor Sandra Fewer (co-sponsored by Supervisor Jeff Sheehy), prohibits passthroughs on cost of debt service and property tax increases upon the sale of a property. The San Francisco Board of Supervisors voted unanimously in support of the legislation.
The bill applies to any building sold after April 3, 2018. Other passthroughs, like those associated with capital improvements or utilities, are still allowed. Berkeley, San Jose and Oakland have passed similar ordinances over the last few years.
Soft Story Retrofit Reminder
The September deadlines for the Mandatory Soft Story Retrofit program are quickly approaching. Take the next step to ensure your property, and your tenants, are better protected by complying with San Francisco’s Mandatory Soft Story Program (MSSP). Failure to submit permits and plans to DBI by the deadline will result in code enforcement action and monetary penalties.
Tier-Two Soft Story Property Owners
If you are a property owner of a building containing educational, assembly, or residential care facility uses (Building Code Occupancy E, A, R2.1, R3.1, or R4), your completion of work and issuance of certificate of final completion is due September 15, 2018.
Tier-Four Soft Story Property Owners
If you are a property owner of a multi-unit building with three or more stories, five or more units, your permit application must be filed with the Department of Building Inspection by no later than September 15, 2018, which is only about two months from now. You also may be able to add accessory dwelling units to your property when performing a seismic retrofit.
For more information, visit www.sfdbi.org.
May Member Meeting
The May 21st SFAA member meeting was held at the Jewish Community Center in Kanbar Hall. The meeting began with the monthly Legal Q & A, moderated by Dave Wasserman of Wasserman & Stern, followed by a legislative update by Janan New, SFAA Executive Director. The meeting was sponsored by Denise Leadbetter, Law Offices of Denise Leadbetter.
The meeting then turned over to Eric Andresen, SFAA board member, and a number of candidates and speakers involved in the June election, including Mayor-Elect London Breed; State Board of Equalization candidate Malia Cohen; District 8 Supervisor candidate Jeff Sheehy; and John Bozeman of BOMA, who spoke about the negative impacts of passing Propositions C and D.
For handouts, videos and minutes from the member meeting and more information on the legislative updates, go to www.sfaa.org.