“California voters in November will decide whether to repeal a 1995 law that put limits on municipal residential rent regulations across the state. And that’s making investors jittery.
On the ballot is California Proposition 10, the Local Rent-Control Initiative, that would effectively repeal the Costa-Hawkins Rental Housing Act. That law had repealed rent control on properties constructed after its passage 23 years ago, and lifted rent rules on individual units, such as condominiums and houses. It also allowed for vacancy de-control. That is, rent rules on units that were vacated would be lifted.
All that might go away if Prop 10 passes. But it wouldn’t happen overnight, as individual municipalities then would have to pass their own rules. Some, like Long Beach, Pasadena and Inglewood, have tried over the years to impose new rent rules, but have failed.
Meanwhile, apartment investors have become more judicious about where they place their capital, shying away from areas that have shown a willingness to adopt stringent rent rules. And indications are that demand, in some areas, has started to soften.”