Costa Hawkins Repeal

16 Replies

My husband and I own a non RSO duplex in LA. We were looking to buy another multi family  this year. But with just learning that Costa Hawkins will likely be repealed in November, we are holding off to see what the outcome is.  

Curious, what are other landlords are doing with the likelihood of Costa Hawkins being repealed. Please share your thoughts. 

Here is an article I came across today featured in the Wall Street Journal.

https://www.wsj.com/articles/california-apartment-landlords-dump-properties-ahead-of-rent-control-vote-1526404269

Originally posted by @Mattaniah Yip :

My husband and I own a non RSO duplex in LA. We were looking to buy another multi family  this year. But with just learning that Costa Hawkins will likely be repealed in November, we are holding off to see what the outcome is.  

Curious, what are other landlords are doing with the likelihood of Costa Hawkins being repealed. Please share your thoughts. 

Here is an article I came across today featured in the Wall Street Journal.

https://www.wsj.com/articles/california-apartment-...

Thanks but no thanks.  Your link to article requires a paid membership to the WSJ... otherwise it's blocked content from reading.

WSJ gives you a limited amount of free articles per month I believe.  Perhaps you surpassed your limit.

Here is another article explaining what Costa Hawkins is:

https://la.curbed.com/2018/1/12/16883276/rent-cont...

Nether less, if you search Costa Hawkins -one can speculate how it will effect property owners in the future.  One of my  main concern it can potentially limit how much a landlord can increase the rent after a property is vacated . Meaning they cannot bring it to market value.  

So I am curious how property owners are handling this.  The WSJ article interviewed one property owner,  and he is unloading his properties and moving his investments to Vegas.  

Originally posted by @Mattaniah Yip :

My husband and I own a non RSO duplex in LA. We were looking to buy another multi family  this year. But with just learning that Costa Hawkins will likely be repealed in November, we are holding off to see what the outcome is.  

Curious, what are other landlords are doing with the likelihood of Costa Hawkins being repealed. Please share your thoughts. 

Here is an article I came across today featured in the Wall Street Journal.

https://www.wsj.com/articles/california-apartment-landlords-dump-properties-ahead-of-rent-control-vote-1526404269

 I am out of state but have been following the story. The truth is that there will be savvy investors who figure out loopholes and ways to profit regardless of the roadblocks thrown up.

I hope to be one of those savvy investors! lol. My husband's uncle owns 100's of units in A plus areas in LA.  I asked his opinion-he just says he is going to wait and see.

Not to be too cynical, but every year for a while now we've had headlines saying that Prop 13 and/or Costa Hawkins was going to be repealed. 

One route to a law repealing Costa Hawkins is through the legislature, which was tried already earlier this year and didn't even make it out of committee.

The second route is via California's direct democracy route (ballot proposition that leads to a constitutional amendment, which is what Prop 13 was), and all we have so far is activists saying they're sure they can do it. They say that every year. 

Journalists these days get paid ultimately for clicks and generating ad revenue. Informing the public discourse is no longer a money maker for journalists, unfortunately. Articles about the 'imminent' end of the world and doom and gloom, etc, tend to get a lot of clicks. It may very well be the case that I'm the person ignoring the little boy who cries wolf on a daily basis, I can't deny that. But until I see some actual dead sheep indicating that the little boy isn't full of crap this time, I feel OK with my assumption.

My $0.02.

Thanks @Chris Mason .  I will take that $0.02.  I am hoping your cynicism is the right sentiment in this case.  I am an advocate for affordable housing, I just don't think the Costa Hawkins repeal is the bandaid that will fix it.

Originally posted by @Mattaniah Yip :

My husband and I own a non RSO duplex in LA. We were looking to buy another multi family  this year. But with just learning that Costa Hawkins will likely be repealed in November, we are holding off to see what the outcome is.  

Curious, what are other landlords are doing with the likelihood of Costa Hawkins being repealed. Please share your thoughts. 

Here is an article I came across today featured in the Wall Street Journal.

https://www.wsj.com/articles/california-apartment-...

1. Some of my clients are holding to wait for the outcome

2. Some are selling selling selling because they fear the worst and they don't want to wait.

We got 6 listings in the westside because of this possible repeal. 

thank you

Originally posted by @Dave Pockets :
Originally posted by @Mattaniah Yip:

My husband and I own a non RSO duplex in LA. We were looking to buy another multi family  this year. But with just learning that Costa Hawkins will likely be repealed in November, we are holding off to see what the outcome is.  

Curious, what are other landlords are doing with the likelihood of Costa Hawkins being repealed. Please share your thoughts. 

Here is an article I came across today featured in the Wall Street Journal.

https://www.wsj.com/articles/california-apartment-...

Thanks but no thanks.  Your link to article requires a paid membership to the WSJ... otherwise it's blocked content from reading.

If you are a real estate investor who owns more than 16 units or a commercial real estate agent you should be subscribed to this website along with several others and some that you pay for period. 

thank you. 

Originally posted by @Mattaniah Yip :

@Siouxzie Hanes  -So your clients are selling?  I haven't seen any decrease in prices. . . I am wondering as November approaches, if prices will decrease.  Also, I didn't see the website you are referring to.

it was in reference to the post regarding the Wall Street Journal. Yes clients are selling, yes some are reducing prices. Our santa Monica listings have had two price reductions already. Yes, some are waiting for November before selling.  I don't think buyers expectation of huge price decreases is one to hope for though.  There will always be a strategy and Sellers won't give away their properites. But we shall see how it plays out...

I don’t own rentals in L.A , I have a relative that rents out a house on the westside .

I’m guessing even if it passed there would be time before the rules were created local cities.

If it passes I could see many landlords wanting to sell so they don’t get stuck with rent control tenants .

Mayor of L.A Eric Garcetti is in support of expanding rent control .

Greetings all,

Now that the Costa-Hawkins repeal has actually qualified to be an initiative on the November ballot, what is the concensus on whether this stands a chance of passing?

I own units in LA and am in the midst of selling a property and trying to leverage up with a 1031 exchange, but I am finding prices sky high and cap rates very low... making me fear the potential of buying now and then losing value if Costa-Hawkins is repealed.

Thanks,
Geoff

Originally posted by @Chris Mason :

Not to be too cynical, but every year for a while now we've had headlines saying that Prop 13 and/or Costa Hawkins was going to be repealed. 

One route to a law repealing Costa Hawkins is through the legislature, which was tried already earlier this year and didn't even make it out of committee.

The second route is via California's direct democracy route (ballot proposition that leads to a constitutional amendment, which is what Prop 13 was), and all we have so far is activists saying they're sure they can do it. They say that every year. 

Journalists these days get paid ultimately for clicks and generating ad revenue. Informing the public discourse is no longer a money maker for journalists, unfortunately. Articles about the 'imminent' end of the world and doom and gloom, etc, tend to get a lot of clicks. It may very well be the case that I'm the person ignoring the little boy who cries wolf on a daily basis, I can't deny that. But until I see some actual dead sheep indicating that the little boy isn't full of crap this time, I feel OK with my assumption.

My $0.02.

 It's because some people fight it instead of ignoring it like youre doing it.  

This time it's on the Ballot as prop 10

see 

https://www.prnewswire.com/news-releases/no-on-10-...

Prop 10 calls for the repeal of the 1995 Costa Hawkins Act which was enacted to limit rent control measures statewide.   Voters will choose whether or not to repeal this legislation as it is included on the November ballot.  

In the event of a repeal, it will merely pave the way for individual cities to enact their own rent control ordinances.   The state of CA can look good by claiming neutrality and leaving it up to the local city governments to decide.

Many local governments (LA & Garcetti aside) know that rent control will not alleviate the housing crisis nor do they wish to alienate their investor constituents that are against rent control measures in any form.

Many studies have shown that rent control does not work and only degrades neighborhoods as landlords defer maintenance and improvements.   It also drives up market rents to even higher levels when units turnover (i.e. New York City).  Artificially tampering with a market driven economy simply does not work.    

Although the issue is not to be ignored, most investors in areas of high appreciation around LA are continuing to acquire property and benefit from above average returns in the market.