Some landlords (such as our firm) are liquidating our rental assets due to the increasing risk of 1979-1995 properties being pulled into rent control regimes.

Some landlords (such as our firm) are liquidating our rental assets due to the increasing risk of 1979-1995 properties being pulled into rent control regimes. Cities like San Jose, Richmond, San Mateo, just this year either debated increasing or actually increased control over rental properties. The population is rising; the supply of rental units is too low; cities want to stop landlords from raising prices; so they are just this year increasing rent control (San Jose just did this). Anything built before 1995 (that's a California State statute) can be (will be) rent controlled (unless population drops dramatically in cities near the coast). The State passed a law (the "Costa-Hawkins Rental Housing Act") that prevents California cities from pulling in any property built after 1995 into a rent control regime. But Costa-Hawkins does not protect rental properties built between 1979-1995. Right now, properties built before 1979 are rent-controlled in California cities (San Francisco, San Jose, etc.) But at the drop of a gavel, a municipality can pull in all properties built between 1979 and 1995 into rent control -- the Costa-Hawkins is the only thing stopping municipalities at the year 1995 (they'd like to be able to rent control every property necessary to accommodate their increasing population over time). The citizens of a municipality in Southern California -- Santa Monica I believe -- narrowly defeated a rent control change designed to extend rent control to apartments built up to 1995. That does not help supply. Jerry Brown trying to 'fast track' development does not remove the risk that newer properties will be rent controlled in the future. A new developer sees partial-confiscation of their asset being a possibility, because the California legislature could modify Costa-Hawkins and remove 1995 as the limit year for rent control. Once a city/state has demonstrated a commitment to seizure of: - a restaurant's right to increase prices - a dentist's right to increase prices - a doctor's right to increase prices - a private school's right to increase prices - a rental property's right to increase prices Those restrictions lead to: - fewer restaurants - fewer dentists - fewer doctors - fewer private schools - fewer apartments Businesses must have freedom to operate or no one will start businesses (supply of businesses will drop). Once a city/state has demonstrated a commitment to partial seizure of personal assets (restaurant, dental practice, apartment property, etc.) of a person, or a business, there is a very strong likelihood that 'seizure/state control' tendency will never stop. So the governor of California can wave his hands all he wants with this kind of "fast track" proposal to building real estate assets in California. Until the state makes it clear that they will stop the partial or "legislative seizure" of rental properties, very few developers are stupid enough to risk a change/nullification of Costa-Hawkins.