California Governor Jerry Brown this week vetoed AB 1229 (Atkins), a bill that proposed to dramatically weaken rent control limitations contained in the landmark "Costa-Hawkins" law and create statewide authority to impose inclusionary zoning requirements. The move by the Governor was welcomed by REALTORS®, who vigorously opposed the bill throughout the legislative process and asked Brown for a veto.
The "Costa-Hawkins" law was sponsored by the California Association of REALTORS® (C.A.R.) in 1995. Under this existing law, new construction of rental units is not subject to local rent control ordinances.
AB 1229 proposed to undo Costa-Hawkins' protections by allowing local governments to impose inclusionary zoning on newly constructed single-family and rental housing developments. The bill would have allowed local governments to create zones in which certain mandates are placed on builders. In this case, the bill would allow cities to create zones and require that all new construction within certain zones set aside a certain percentage of the housing at below-market rate levels.
Realtors actively opposed this bill, arguing that builders would be less inclined to build within these zones, or they would pass the additional cost on to their other tenants or buyers. This measure would discourage the creation of new rental housing at a time when it is most needed, which would result in a further tightening of the rental market and an increase in prices.
Despite intense efforts by Realtors, developers and landlords to persuade legislators to oppose AB 1229, the bill passed both the state Assembly and the Senate.
"We are glad the Governor understood our concerns about the bill. Under the Costa-Hawkins law, a city cannot unilaterally impose rent control. We believe cities should not be allowed to impose rent control, or set asides in for sale property, regardless of the desire of the builder," said Carolyn Miller, president of the Silicon Valley Association of REALTORS®.
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
Variations of this article have appeared in local area newspapers.
For further information, please contact Rose Meily at SILVAR Public Affairs, email , or phone (408) 200-0109.