Rent control measure and its impact on renters, landlords

October 9

Proposition 33 addresses rent control in California – or at least how much authority local government has over rent control.

For starters, what is rent control? Rent control limits how much a landlord can increase rent year after year. While apartment complexes sometimes do offer leases that are rent-controlled, there are limits on how much the local governments can enact those rent controls.

Prop 33’s impact on renters and landlords

If Prop 33 passes, renters living in properties covered by expanded rent control laws would likely benefit from lower rent increases or stabilized rent. Local governments would have more power to regulate rent hikes, potentially keeping costs more manageable for current tenants. For those in properties not subject to rent control or where rent controls are not expanded, rents could rise faster due to market adjustments.

If Prop 33 passes, landlords may face stricter limits on how much they can raise rent, leading to decreased potential income from their rental properties. Some landlords may decide to sell their rental properties, especially if the regulations make renting less profitable. The value of rental properties might also decrease as potential buyers may be less interested in purchasing regulated properties with limited income potential.

What a yes vote means

A “yes” vote on Prop 33 essentially removes the limits placed on local governments.

The limit currently placed on local government’s power over rent control stems from the Costa-Hawkins Rental Housing Act of 1995. The 29-year-old law prohibits cities from setting rent control on single-family homes or apartments built after 1995. Prop 33, if it passes on Nov. 2024, would repeal Costa-Hawkins Rental Housing Act.

For context, similar ballot measures have tried to take down Costa-Hawkins Rental Housing Act in 2018 and 2020, but both efforts ended up failing. In 2019, Gavin Newsom signed a law limiting annual rent increases across California to 5%, with inflation taken into account.

The proposition itself does not make any changes to existing local rent control laws. The prop would prevent the state from taking future actions to limit local rent control, and place that responsibility on local governments.

What a no vote means

A “no” vote on Prop 33 keeps the Costa-Hawkins Rental Housing Act in effect. This will mark the third time in six years that a push to let local governments have more power in controlling rent increases has failed to pass.

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