Prop 21 - Rent Control on Residential Property - Questions

[Ryan Wamsat]

I've read through the voter information guide as well as the text of the proposition on ballotpedia.  Section 3f states "To exempt the owners of one or two residential dwellings from any local rental control law."  Neither provided any clear guidance.  I'm hoping the gurus here have more insight into this.

My questions are these:

1. If an out-of-state landlord only has one rental property in California and additional rentals in another state, is he/she exempt?

2. Similar to question 1: If a California landlord has one in-state rental and multiple out-of-state rentals, is he/she exempt?

3. Lastly, what happens if the rentals are put in an LLC and therefore not "owned" by a person anymore. Assuming that LLC only has the one rental. Is it exempt?

[Jon Schwartz]

Originally posted by @Ryan Wamsat:

I've read through the voter information guide as well as the text of the proposition on ballotpedia.  Section 3f states "To exempt the owners of one or two residential dwellings from any local rental control law."  Neither provided any clear guidance.  I'm hoping the gurus here have more insight into this.

My questions are these:

1. If an out-of-state landlord only has one rental property in California and additional rentals in another state, is he/she exempt?

2. Similar to question 1: If a California landlord has one in-state rental and multiple out-of-state rentals, is he/she exempt?

3. Lastly, what happens if the rentals are put in an LLC and therefore not "owned" by a person anymore. Assuming that LLC only has the one rental. Is it exempt?

Also, one more important point about Prop 21 that isn't immeditely apparent in the language:

Prop 21 isn't going to put these measures into place. Rather, it gives local governments new limits on what ordinances they can put into place. Prop 21 would replace the limits put in place by the Costa-Hawkins law. So to summarize the three big changes:

1. Costa-Hawkins prevented city and county ordinances from including any single-family home in rent control. Prop 21 gives cities and counties the ability to include single-family homes in rent control except in cases where the owner is a natural person who owns two or fewer homes.

2. Costa-Hawkins excluded any buildings built after Feb 1 1995 from being including in local rent control. Prop 21 changes that exclusion to a 15-year rolling basis.

3. Costa-Hawkins forbid vacancy control, wherein rent is regulated when there's a vacancy. Prop 21 allows for vacancy control, but if any local government includes vacancy control in their ordinance, they must allow at least a 15% increase in rent from the outgoing tenant's rate.

Item #3 is what really FREAK ME OUT! Vacancy control is death to investors and cities alike. Spread the word: NO ON PROP 21!

Best,

Jon