09 Dec December 2019
“There are many lessons that we should have learned from the rent control battle of AB 1482…””
As we come to the end of the year, we must be strategic understanding and operating our rental properties under the new rent control law known in some circles as AB 1482. My advice is that each of you read the bill carefully and be mindful of compliance dates and affirmative action that you need to follow. It is very important that we, as rental housing providers, understand that we are in business just like any other owner/operator who invests and risks our life savings. All of our efforts seek to make a reasonable profit based on risk.
There are many lessons that we should have learned from the rent control battle of AB 1482, and the Proposition 10 battle. One lesson that we should have learned is the importance of messaging. There were millions of dollars spent by all sides in lobbying efforts that yielded various results. The passage of AB 1482 was passed with large compromises, which leaders in our industry believed we could live with after defeating Proposition 10.
It has been stated by many that the multifamily industry is the economic engine of our communities at the national, state and local levels. Unfortunately, our industry will continue to be under attack due to housing availability and affordability as more and more households turn to the rental housing markets because they have been priced out of the buying market.
We should all be aware that Michael Weinstein, President of the LA AIDS Healthcare Foundation, is gathering signatures for the successor to Proposition 10. It is reported that Weinstein is on a mission to repeal the Costa-Hawkins Act and further restrict the rental housing market. Can you imagine California barring the ability of reestablishing the market rent at the time we re-rent a dwelling?
Rental housing shortages are not limited to our coastal areas. Lawmakers across the nation face rental housing stock limits. Everyone knows it, but there are a lot of people who do not believe two basic issues: (1) When demand for any product far exceeds supply, prices will rise; and (2) When restrictions are severe, solutions will suffer. We must solve the crises by increasing the supply and incentivize developers and investors to continue to remain or enter the market. Wishing everyone the best for the holiday season.