1/31/12

SB 184, Senator Leno's effort to impose rent control on new construction of rental housing, died today.

C.A.R. opposed Senator Leno’s SB 184 because it would have weakened key provisions of the “Costa Hawkins Act”, which C.A.R. sponsored in 1995, to help encourage the development of new rental housing in our State.

Currently, under the “Costa Hawkins Act”, new construction is exempt from rent control; this exemption was upheld by the 2009 Second District Court of Appeals decision in Palmer v. City of Los Angeles, a case in which a private developer challenged the City of Los Angeles’ efforts to enforce an affordable-housing fee despite Costa-Hawkins’ protections. SB 184 sought to overturn the decision in Palmer v. City of Los Angeles and would have allowed local agencies to mandate below-market rents on newly constructed rental units for as long as 55 years without offering reasonable and economic development incentives.

SB 184 would have trampled on this key provision of Costa-Hawkins and would have made it a virtual certainty that local Government would impose residential rent control on new construction. The measure lacked financial incentives for developers to build affordable housing, discouraging the development of such housing at a time when it is most needed. SB 184 also did not address any of the factors that cause high housing costs and would have worsened rental housing markets  when housing economic conditions are the most depressed in decades – further reducing production of new rental housing stock and very negatively impacting construction employment.

The Legislature agreed with our Position on SB 184 and it died on the Senate Floor today (January 31st, 2012), the last day for bills to get out of their house of origin if they are to continue on through the legislative process this year.

Thanks very much to the volunteer Key Contacts, who as part of C.A.R.’s Government Affairs Team, helped stop this bill. This is a big win for private property rights!!