By Summer Knight
2025 President
Santa Barbara Association of Realtors
Last week I was in Sacramento, along with other local colleagues, representing our Santa Barbara community at the California Association of REALTORS®’ Board of Directors meetings.
A significant moment of this year’s meetings is the celebration of the 30th anniversary of the Costa-Hawkins Rental Housing Act, landmark legislation passed in 1995 that remains a foundational safeguard for both property owners and future renters across California.
Before Costa-Hawkins, cities like Santa Monica, Berkeley, and San Francisco adopted extreme rent control ordinances, including “vacancy control”, a policy that capped rents indefinitely, even after a tenant moved out. These policies stripped owners of the ability to adjust rents to meet rising costs, discouraging investment and causing many to sell their properties at a loss. Housing providers were left without a fair return, and the rental housing market suffered.
Costa-Hawkins brought back balance and fairness by establishing three key protections that still stand today:
- Vacancy Decontrol: Property owners can reset rent to market rates once a tenant voluntarily moves out, allowing rents to reflect current economic conditions.
- New Construction Exemption: Rental units built after February 1, 1995, are exempt from local rent control ordinances, an essential incentive to keep new housing construction viable.
- Protection for Single-Family Homes and Condominiums: Individually owned homes and condos are exempt from rent control, recognizing that many small landlords are just regular families trying to make ends meet, not large corporations.
It’s critical to remember that Costa-Hawkins doesn’t eliminate rent control, it simply ensures that it doesn’t go too far. It protects investment in housing, promotes the construction of new units, and offers stability for small property owners, who make up a significant share of California’s rental market.
Without this law, developers could hesitate to build in communities where local governments might later impose rigid rent caps, worsening our already dire housing shortage. As Nobel Prize-winning economist Paul Krugman and the Brookings Institution have both observed, rent control may help certain tenants in the short term, but it does nothing to expand the supply of housing.
As we celebrate 30 years of Costa-Hawkins, we’re reminded that thoughtful policy helps ensure housing is both available and sustainable. The Santa Barbara Association of REALTORS® will continue advocating for laws that promote fairness, protect investment, and support the creation of housing for future generations.
Summer Knight is a Santa Barbara native and top producing Realtor at Sun Coast Real Estate. Summer has been a member of the Santa Barbara Association of Realtors for over 20 years and currently serves as the President of the Board of Directors. Reach Summer at 805-886-1261 or summer.k.knight@gmail.com.
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