LOS ANGELES, April 30, 2018 /PRNewswire/ -- The Apartment Association of Greater Los Angeles made this statement about the "Affordable Housing Act" voter initiative that would repeal Costa-Hawkins:
While the proponents of this initiative falsely claim that repealing Costa-Hawkins will result in more affordable housing, real world experience in city after city has proven this to be false. Without Costa-Hawkins, overall California housing availability will greatly suffer as sources of capital for new apartment construction dry up. No one will invest in property that must be operated at a loss by government mandate, which will be the effect of repealing Costa-Hawkins. No property will be updated or modernized, since forcible rent control disincentivizes any kind of investment. Apartments will simply be converted to condominiums or other uses at the first opportunity. A repeal of Costa-Hawkins will profoundly harm the very population it is designed to help. We advise Californians to look for an apartment in grandfathered rent control cities like Berkeley or Santa Monica to see the devastation and poor living conditions that will descend upon their own community.
The follow-on effects of a Costa-Hawkins' repeal will be devastating across California. Single family home and condominium values will decline since they would be subject to rental price fixing as well. Property owners would also lose a relief valve and choice of how they use their own private property. Building trades would suffer in both use of materials and contracting jobs as remodeling and new construction across the State dries up. The cost of repealing Costa-Hawkins would be measured in Billions, including reductions in property tax income due to plummeting property values that would affect the budget of every school district and city in California.
And what of young and upwardly mobile Californians? They would be trapped in their current homes, unable to find new apartments in order to accept new jobs or pay the new flotilla of fees that would be generated by the inevitable brokers with special access to listings, which is pervasive in rent control markets like Manhattan for the same reasons it will become a fixture of the California landscape.
We need affordable housing in California, and we need more of it. Everyone agrees, no one more than the "mom and pop" owners of small apartment buildings that are the majority of Apartment Association of Greater Los Angeles' members. Working together, we can find ideas that work. Repealing Costa-Hawkins is not one of them. It is a knee jerk non-solution that would make a real problem much worse and, at the same time, harm the interests of every person in California.
Apartment Association of Greater Los Angeles Executive Director, Daniel Yukelson, stated: "The majority of our members are 'mom and pop' owners that own 5 or fewer units. Without the protections of Costs-Hawkins, many of our members will face financial peril as the value of their investments in property plummet and their ability to generate rental income is severely restricted. So many of our members have worked for years to purchase and afford their rental properties as a means to subsidize their own housing costs, or to finance retirements or long-term care as they age. They chose to invest in real estate that benefits the community rather than Wall Street. They held jobs that did not offer pensions or 401(k) plans – they purchased rental property instead. And now, their hard work and investments are at risk should this 'bankruptcy bill' pass. They could lose everything."
AAGLA President Earle Vaughan added, "Rent Control is not targeted to those in need, and it rarely benefits the people it is meant to help. By taking away what little profit exists for the mostly small apartment owners operating in this state, most will be put out of business. We will deliver that message with passion and focus until the voters reject this misbegotten idea come Fall."
SOURCE Apartment Association of Greater Los Angeles