Rent Control Gains in Popularity as Renter Households & Rents Rise

Rent Restriction - dictionary definition highlighted with yellow marker; rent control

If you have been watching the rental market in California, you’ll have noticed that rents are increasing faster than wages.

Jeff Collins reporting in the Orange County Register notes – over the past seven years, rent increased $337 a month on average in Orange County and $450 a month in Los Angeles County, according to Reis Inc. In the Inland Empire, the average seven-year gain was $255 a month. That amounts to rent hikes of about $36 to $64 each year for the average tenant.

Housing groups in Orange and Los Angeles counties are seeing a spike in the number of tenants calling to complain about big, sudden rent hikes. The Fair Housing Council of Orange County, for example, reported that rent increase complaints rose from 2 percent of all calls in 2010 to almost 12 percent last year. But some landlords are playing catch up after years of neglecting to raise the rents, creating the rent version of sticker shock for some tenants.

This is not a good sign for renters and talk of Rent Control is coming to the forefront again in many cities, including here the Orange County. According to a Chapman University poll, as reported in the Orange County Register – 59% of Orange County residents support rent control. For now, only one of Orange County’s 34 cities — San Juan Capistrano — has any form of rent control, and it’s limited to mobile homes.

Although rent control varies from city to city, all versions of it tend to cap rent hikes and limit the landlords’ right to order a tenant to move out. The rules also usually create rent-control boards to oversee the process and mediate landlord-tenant disputes.

Costa-Hawkins Rental Housing Act

Of concern to landlords and developers alike is a ballot initiative to repeal the 1995 Costa-Hawkins Rental Housing Act, which has 25% of the required 365,880 signatures from California voters to qualify for the November ballot.

Costa Hawkins prohibits cities from applying rent control ordinances to condominiums, single family homes or new construction — anything built after 1995 or after a city first established rent control. It also bans what is known as “vacancy control,” which means capping a landlord’s ability to hike the rent after a tenant moves out and another moves in.

California may soon become a majority-renter state.

Renters made up 46 percent of California households in 2016, up from 42 percent in 2005, U.S. census figures show. Dowell Myers, a USC demographer, agrees with economists who predict the state soon might have more renters than homeowners, though he noted that the trend wouldn’t guarantee renter domination of the electorate; homeowners and older citizens are more likely to vote.

Bottom Line

Rent growth is outpacing income growth at a level that is not sustainable and will continue to negatively impact tenants.



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