‘Justice for Renters Act,’ Opposed by Landlords, Gathers Enough Signatures To Qualify for 2024 Ballot
A measure that would allow for the expansion of rent control in California is headed to the ballot in 2024. (Getty Images)
By Jack Witthaus CoStar News
August 4, 2023 | 1:57 P.M.
California voters will be asked next year whether to approve a measure that would allow for the expansion of rent control, a move that could curb multifamily valuations and decrease revenue for local governments.
The "Justice for Renters Act" gathered enough signatures to qualify for the Nov. 5, 2024, ballot in the nation's most populous state, according to the California Secretary of State. The move faces opposition from groups of multifamily building owners.
The measure aims to repeal limits on rent control laws in the state's Costa-Hawkins Act preventing rent control on any single-family homes and housing built after February 1994 and allowing landlords to set rent at whatever price they want when a new renter first moves in.
The "Justice for Renters Act" comes as some California cities are among the most expensive to rent in the nation because of a lack of housing supply. Six of the 10 priciest apartment markets in the country are in the Golden State, according to CoStar data. That limited supply causes competition for housing, driving up rents.
The "Justice for Renters Act" would curtail values for multifamily properties statewide as new investors may not want to pay as much for apartments, according to a Feb. 10 letter signed by Joe Stephenshaw, the director of California's Department of Finance. Landlord rental income would fall, too, as renters wouldn't pay as much, Stephenshaw wrote. The measure doesn't affect the requirement that rent control laws must allow landlords to receive a fair rate of return, according to the letter.
If approved, the act may cause a potential reduction in state and local revenues in the high tens of millions of dollars per year, according to the letter. Still, it's unclear the effect on landlords paying income taxes if the measure becomes law due to a decrease in rental income, Stephenshaw wrote.
Organizations that back business and real estate owners largely oppose the measure, with one group calling the act "Armageddon on property owners." The act's biggest supporter is the Los Angeles-based AIDS Healthcare Foundation, which has donated more than $7.9 million so far, according to ballotpedia.org.
留言