What a change to rent control restrictions could mean for you

Roaches and a rent hike prompted Tiffany Smith to leave Los Angeles, where she said "housing is ridiculous."

In 2015, Smith and her then 13-year-old son packed up their rent-controlled apartment ($1,325 in Westlake) and crashed with her mom in Hesperia. Her plan was to save money from her television and film production work to buy, maybe in Monrovia.  

The commute was painful. Six hours a day on public transit was enough to make her miss the roaches.

She stuck it out with mom for six months, and started scrolling Craigslist.

When an ad for $1,350 one bedroom in Pasadena popped up, Smith knew she had to seize it. She showed up three hours before the showing and hunkered down in her car outside waiting to put in the fight.

“Check in hand. All the pay stubs. Everything ready to go,” she said.

She got it and hasn’t seen a rent hike of more than three percent a year since. Now she jokes she may never leave.

If you consider income and rental rates side by side, half of the country’s most burdened metro areas are in California, according to a 2017 report by Apartment List. Those areas include Fresno, Oxnard, Riverside, Los Angeles and San Diego.

Incomes have simply not kept pace with soaring housing costs, a 2017 report by the California Department of Housing and Community Development found.

The disparity pinched Amika Sodhi’s pocketbook, prompting the marketing professional to make a choice that might surprise some people.

She moved to San Francisco. Why? Sodhi said that as expensive as it is there, the pay was more attractive, making it more bearable to pay steep rents.

Now she said she pays between 30 and 35 percent of her income for 600 square foot studio in “a lovely little basement.”

“L.A. just isn’t keeping up,” Sodhi said.

Los Angeles Mayor Eric Garcetti is among local leaders endorsing a proposed ballot initiative to lift state limitations on rent control. Supporters of the “Affordable Housing Act” are submitting signatures to counties this week to send the measure the November 2018 ballot.

So here’s the tension: Expanding rent control could stem sky-high housing costs for some but would it also throw a wet blanket on future building?

Here’s a practical guide to what you need to know:

Is my apartment rent controlled?

Rent control policies can differ by location and building. In units subject to rent control, landlords are limited in how much they can increase rent, which can vary depending on existing local laws.

Twenty-three years ago, California’s Costa-Hawkins Rental Housing Act prohibited local policymakers from capping rent increases on buildings built after 1995. Other consequences of that state law:

• It banned vacancy control, which limited landlords in what they can charge after a tenant moves out
• It kept in place exemptions to rent control in cities such as Los Angeles
• It also exempted single-family homes from rent control.

In L.A., rental units built before October 1978 may be subject to the city’s Rent Stabilization Ordinance. You can search properties subject to rent control on the city’s site.

Would repealing Costa Hawkins keep my rent where it is?

Not necessarily. If Costa Hawkins is repealed, it would fall to local policy makers to set new ordinances, which could expand rent control to newer buildings and single-family homes.

Who’s pushing for the change?

“We need for tenants to be protected,” said Elena Popp, executive director of the Eviction Defense Network.

Popp believes “a local fix is needed” and threw her support behind the repeal effort, which is primarily being funded by the AIDS Healthcare Foundation.

The AIDS Healthcare Foundation has a mixed history with housing development. A couple years ago, it filed a lawsuit to block the construction of a tower of apartments planned near the foundation’s headquarters in Hollywood.

“What is being built is not addressing affordability crisis,” said foundation spokesman Ged Kenslea, adding the impact on the environment and traffic wasn’t being considered.

“There’s got to be a balance,” he said.

Is there a down side?

Opponents of the proposed initiative argue that opening the door for expanded rent control would likely discourage new construction.

“This will pour gasoline on California’s housing crisis,” said Steve Maviglio, a political consultant working for “Californians for Responsible Housing” campaign committee aimed at opposing the repeal of Costa-Hawkins. The committee is largely funded by the California Apartment Association made up of property owners and business leaders.

The California Legislative Analyst's Office points out the root of the affordability problem is a shortage of housing – an issue that isn’t likely to be fixed by expanding rent control.

“Households looking to move to California or within California would therefore continue to face stiff competition for limited housing, making it difficult for them to secure housing that they can afford,” the office stated in a 2016 report.

Maviglio said the solution to the housing crisis would be speeding up construction by easing regulation and improving incentives to build affordable housing.