page_title: Costa–Hawkins Rental Housing Act
section_title: Constitutional limits
hierarchical_section_title: Costa–Hawkins Rental Housing Act / Rent control in California / Legal context / Constitutional limits
caption_attribution_description: English: The Ronald Reagan State Building in the Civic Center district of Downtown Los Angeles, California. This building is home to the Los Angeles panels of the California Court of Appeal, Second District, as well as a branch office of the Supreme Court of California. The Supreme Court borrows the Court of Appeal's courtroom when it hears oral argument in Los Angeles.
context_page_description: The Costa–Hawkins Rental Housing Act is a California state law, enacted in 1995, which places limits on municipal rent control ordinances. Costa–Hawkins preempts the field in two major ways. First, it prohibits cities from establishing rent control over certain kinds of residential units, e.g., single-family dwellings and condominiums, and newly constructed apartment units; these are deemed exempt. Second, it prohibits "vacancy control", also called "strict" rent control.
  If an apartment is under "vacancy control", the city's ordinance works to deny or limit an owner's ability to increase its rent to new tenant. It works this way even in cases where the prior tenant voluntarily vacated the apartment or was evicted for a 'just cause'. In other words, Costa–Hawkins, by now prohibiting "vacancy control" in the above voluntary or 'just cause' circumstances, mandates that cities allow an apartment owner the right to rent the vacancy at any price.
  Rent control in California is largely the creation of its municipalities. This ability of city governments is limited by the federal and state constitutions, as well as federal and state laws.
context_section_description: For the California State Assembly its analyst Stephen Holloway commented on the constitutional and legal context of rent control, specifically between the state and local governments (e.g., cities). When Costa–Hawkins was enacted, existing California law made "no statutory provision for, but does not prohibit, the adoption of local rent control ordinances. Case law, Birkenfeld v. City of Berkeley (1976) 17 Cal. 3d 129, held that rent control is a proper exercise of a local government's police power if it is reasonably calculated to eliminate excessive rents and at the same time provide landlords with just and reasonable returns on their properties."
  In the 1997 Kavanau case, a rental property owner challenged the City of Santa Monica's rent control law as a form of "taking" or inverse condemnation prohibited by the federal Constitution. The California Supreme Court affirmed the rulings by lower state courts in favor of the City. In the 2005 Berger Foundation case, the California Court of Appeal upheld an ordinance which provided that the city council sitting as a rent board would determine what was fair, just, and reasonable regarding an owner's comparable return on investment. The ordinance did not establish a specific formula or procedure to apply when faced with a requested rent increase, but instead stated eleven factors to consider. Here the board had then relied on an expert's opinion.
caption: A site of the Supreme Court on S. Spring St. in Los Angeles.
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