San Diego and Orange County to adopt rent control

[Chris A Godbolt]

I have been reading and listening to local news here in San Diego. I am still a rookie looking to invest in my first deal this year. But while I was researching I found that 55 % of voters support the implementation of rent control and 60% support for the state as a whole! From what I have read and listened to now audio books this is a very bad thing for the local markets. I was wondering if anyone had any experiences they would like to share if they live or invest in areas that already have implemented rent control. Is this something SoCal investors should worry about or are there strategies to turn this into a great thing. Thanks all for your opinions in advance.

[Dan H.]

Originally posted by @Chris A Godbolt:

I have been reading and listening to local news here in San Diego. I am still a rookie looking to invest in my first deal this year. But while I was researching I found that 55 % of voters support the implementation of rent control and 60% support for the state as a whole! From what I have read and listened to now audio books this is a very bad thing for the local markets. I was wondering if anyone had any experiences they would like to share if they live or invest in areas that already have implemented rent control. Is this something SoCal investors should worry about or are there strategies to turn this into a great thing. Thanks all for your opinions in advance.

I do not know where you get your numbers but prop 10 recently got whooped on a state level and that proposition was not to institute rent control but simply to allow municipalities to institute rent control where it is now banned on the state level (biggest aspect is no rent control on units built after 1995 and exempts SFR and condos from rent control state wide). See Costa Hawkins for current state wide limitations on rent control.

So on a state level this would seem to indicate Californian voters are soundly against rent control.  However, there are pockets of areas where this is not the case.  Los Angeles' RSO and the various San Francisco rent control laws demonstrate that rent control has some significant advocates in certain areas in CA. 

San Diego at this time is not one of those areas. The city council has never come close to placing rent control regulations. STR regulations are a different issue as the San Diego city council has passed and later rescinded STR regulations.

In San Diego, I would not worry about rent control regulations in the near term.  A decade from now may be a different story.

Note the same is not true for STR regulations. Those could be coming in as short as a year or two and to purchase in San Diego relying on STR is a risky endeavor.