Los Angeles
The Rent Control Affordability Act is the latest push for rent control restrictions in California. The measure has officially been placed on the statewide ballot in November, and would expand current rent control restrictions to include vacancy control and rent control for single-family houses and condos. Like other legislative responses to the affordability crisis, the commercial real estate community is in fervent opposition to the measure, however, it is already gaining momentum.
"The Rent Control Affordability Act seeks to amend existing California rent control law in two ways: by removing the landlord's ability to increase rent to market-rate after a vacancy and by expanding rent control to include single-family homes or condos," Bruce Furniss, senior director at Berkadia, tells GlobeSt.com. "Rent control's negative impacts on local markets are three-fold—it decreases supply, isn't tied to those who need it most and increases administrative operating costs."
While Furniss didn't predict whether the measure would pass in November, he said that property owners are following the act closely and looking for ways to mitigate the potential impact of the act. "Property owners should keep a close eye on the results in November. By keeping rent current and at market, owners can mitigate much of the negative impact of rent control," he says.
There has been a rise in legislative efforts to respond to the housing crisis. "Across the country, we are seeing state-based rent control legislation crop-up, as states aim to solve the affordable housing crisis. Unfortunately, these laws are really compounding the long-term issues of affordable housing by stunting local markets and not designating aid to those most in need," says Furniss. "However, as a nation, we should be turning our attention away from rent control and towards the real crisis facing our country—affordable housing."
The commercial real estate industry supports tax incentive programs to fuel affordable housing supply. "Affordable housing supply Affordable housing initiatives are specifically designed not to stunt economic growth—as they often include a tax incentive program for investors—and these initiatives also offer affordable rent provisions for those in need of housing that fits within their budget," says Furniss.
The industry also supports more housing development throughout the state to bring the cost of housing down. "Of course, the easiest way to mitigate our country's housing crisis is simply to build more housing," says Furniss. "Let the multifamily market address our country's housing crisis by building more much-needed housing. Doing so will eliminate the cumbersome regulations and burdensome costs builders confront when trying to do so."
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Kelsi Maree Borland
