A bill that would enable price controls on new residential rental units will be heard in the final weeks of the Legislative Session.  AB 1229 (Atkins; D-San Diego) allows local governments to mandate “inclusionary housing” requirements on private property owners and force them to set aside a certain percentage of new housing for low-income rental units.  The bill also restricts rental rates and operational costs, and does not require any type of public offsets for providing the housing.  The bill is intended to abrogate the Palmer v. City of Los Angeles decision, which upheld an important provision of the long-standing Costa-Hawkins Rental Housing Act exempting newly constructed rental units from price controls.

Rental housing is desperately needed. At a time when rental housing is scarce, it makes no sense to discourage the building of new rental units, as AB 1229 does. The bill would make it a virtual certainty that local jurisdictions with rent control ordinances would expand such regulatory provisions to include new construction, discouraging the development of rental housing, at a time when it is most needed.

The Legislature has twice rejected similar bills and expressed opposition to expanding rent control to new construction. However, with the new partisan makeup of Legislature this policy may have a better chance of success.  We are also concerned that if passed, this bill would directly lead to similar constraints placed on commercial projects.

We hope you will call you call your Senator and urge them to vote against this bill.  Click here to find your legislator.

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