Costa-Hawkins 1995: Which Bay Area Properties Exempt?
The state law that caps local rent control — and why knowing your building's exemption status is the single most important thing a Bay Area landlord can do.
The Costa-Hawkins Rental Housing Act (1995) exempts Bay Area rental units built on or after February 1, 1995 from local rent caps in every city in California. Single-family homes and condos are also exempt if the landlord gave proper written notice before the tenancy. Costa-Hawkins also mandates vacancy decontrol — landlords can reset rent to market when a tenant voluntarily leaves, regardless of how long the rent was frozen.
I've talked to Bay Area landlords who bought buildings in 2018, 2020, 2022 — thinking they were free from rent control because the buildings were new. Some were right. But a surprising number were still subject to Oakland's just-cause eviction ordinance and didn't know it. Costa-Hawkins exempts from rent caps, not necessarily from just-cause eviction. That's a distinction that can cost you thousands if you assume the wrong thing.
Costa-Hawkins is the single most important state law shaping Bay Area landlord-tenant relationships. It was passed by the legislature in 1995, and it drew a hard line: local governments cannot use their rent control ordinances to cap rent on newly constructed units or on single-family homes and condos. It also eliminated vacancy control, which some cities had used to keep rent frozen even between tenancies.
This guide breaks down exactly what Costa-Hawkins does, what it doesn't do, how it interacts with local ordinances in San Francisco, Oakland, Berkeley, San Jose, and the Peninsula cities, and how you determine whether your specific Bay Area property is fully exempt, partially exempt, or fully covered under the law.
- The Three Things Costa-Hawkins Actually Does
- What Properties Are Exempt in the Bay Area
- Bay Area City-by-City: Local Cutoff Dates and Rules
- How to Determine Your Building's Exemption Status (Step-by-Step)
- Vacancy Decontrol: The Reset Nobody Talks About
- What Costa-Hawkins Does NOT Cover: Just-Cause Eviction
- How AB 1482 Interacts with Costa-Hawkins
- The Investment Math: Below-Market Rents and Vacancy Events
- The Political Future: Repeal Risk
- Quick Reference Cheat Sheet
- Frequently Asked Questions
The Three Things Costa-Hawkins Actually Does
Costa-Hawkins does exactly three things. Everything else about rent control in the Bay Area is local city law. Here are the three:
1. Exempts New Construction from Local Rent Caps
Units with a certificate of occupancy issued on or after February 1, 1995 cannot be subject to local rent caps. Period. It doesn't matter what city you're in or how aggressive their rent ordinance is — if the building is new enough, the rent cap doesn't apply. This is why Oakland only covers pre-1983 units, SF only covers pre-June 1979 units, and Berkeley only covers pre-1980 units — those cities set their own cutoffs before 1995, but Costa-Hawkins set a statewide ceiling that they cannot exceed.
In practical terms, this means a landlord who owns a 2003 construction apartment building in Oakland or a 2010 condo building in Berkeley is operating entirely outside the local rent cap system. They can raise rents by whatever amount market conditions allow — subject only to AB 1482's statewide cap once the 15-year exemption period expires.
2. Requires Vacancy Decontrol
Before Costa-Hawkins, some Bay Area cities had vacancy control — rent stayed frozen even when a tenant voluntarily left. Costa-Hawkins ended that. Now, when a tenant voluntarily vacates any rent-controlled unit, the landlord can reset rent to market rate. The next tenant starts a new rent-controlled clock at the new (market) rent. This is why long-term tenancies in SF and Oakland are so valuable to tenants — the rent has been compounding at CPI increases for years, and the gap from market can be enormous. A tenant who moved into a Mission District flat in 2002 may be paying $1,100/month in a unit that now rents for $3,400 — and that gap disappears the moment they voluntarily vacate.
3. Exempts Single-Family Homes and Condos
With proper written notice before the tenancy begins, owners of single-family homes and condos can exempt their properties from local rent control. The notice must be given before the tenant takes possession and must meet specific statutory requirements. If you forget to give notice, you may have waived the exemption — and the unit becomes subject to the local ordinance. This is one of the most frequently mishandled situations in Bay Area landlord law, and it catches condo owners and small landlords who assumed their unit was automatically exempt.
What Properties Are Exempt from Rent Control in the Bay Area
- Units built after February 1, 1995 (Costa-Hawkins)
- Single-family homes (with proper pre-tenancy notice)
- Condos (with proper pre-tenancy notice)
- Units in owner-occupied buildings of 2 units or fewer (many ordinances)
- Newly constructed ADUs (state exemption, post-2020)
- Units in cities without local rent control (San Jose, Fremont, Palo Alto)
- TIC units (in most circumstances — verify locally)
- Multi-family units built before the city's local cutoff date
- Pre-1979 SF rental units (SF ordinance)
- Pre-1983 Oakland rental units (Oakland RAP)
- Pre-1980 Berkeley units (Berkeley ordinance)
- Pre-1995 Mountain View units (CSFRA)
- Pre-1995 Richmond, Hayward, Alameda units
- Pre-1995 East Palo Alto units
Many Bay Area condo owners think their unit is automatically exempt from rent control. It's not automatic. You must give proper written notice BEFORE the tenancy begins. If the tenant has already moved in without receiving notice, the exemption may be waived and the unit may fall under local rent control. Always consult an attorney before renting a condo without confirming you've given proper statutory notice.
Bay Area City-by-City: Local Cutoff Dates and Rules
Costa-Hawkins sets the ceiling (February 1, 1995), but every Bay Area city with a rent ordinance has its own local cutoff that may be even more restrictive. The table below shows the key rent control parameters for the major Bay Area cities as of 2026.
| City | Local Rent Ordinance? | Local Cutoff Date | Typical Annual Cap | Just-Cause (Beyond Rent Cap)? |
|---|---|---|---|---|
| San Francisco | Yes | Before June 13, 1979 | 60% of CPI (typically 1–3%) | Yes — citywide for covered units |
| Oakland | Yes | Before July 1, 1983 | CPI (typically 1–3%) | Yes — citywide regardless of build date (Measure JJ) |
| Berkeley | Yes | Before June 1980 | 65% of CPI | Yes — for covered units |
| Mountain View | Yes (CSFRA) | Before October 19, 2015 | CPI (capped at 5%) | Yes — for covered units |
| East Palo Alto | Yes | Before January 1, 1988 | Varies by ordinance | Yes — for covered units |
| Richmond | Yes | Before July 22, 2016 | CPI (max 3%) | Yes — for covered units |
| Alameda | Yes | Before January 1, 1995 | Up to 5% or CPI | Yes — for covered units |
| Hayward | Yes | Before July 1, 1979 | Up to 5% | Yes — for covered units |
| San Jose | Limited | No local rent cap ordinance | AB 1482 applies (15+ yr units) | AB 1482 just-cause for covered units |
| Fremont | None | No local rent cap ordinance | AB 1482 applies (15+ yr units) | AB 1482 just-cause for covered units |
| Palo Alto | None | No local rent cap ordinance | AB 1482 applies (15+ yr units) | AB 1482 just-cause for covered units |
| San Mateo | None | No local rent cap ordinance | AB 1482 applies (15+ yr units) | AB 1482 just-cause for covered units |
| Marin County (unincorporated) | None | No local rent cap ordinance | AB 1482 applies (15+ yr units) | AB 1482 just-cause for covered units |
A few important notes on reading this table. First, local cutoff dates represent when the city's local ordinance takes effect — any building with a certificate of occupancy on or after that date is exempt from the local cap. Second, cities like Mountain View passed their ordinance (CSFRA) much later — in 2016 — so their local cutoff is far more recent than SF or Oakland. Third, even in cities with no local rent control ordinance, AB 1482 functions as a statewide floor for multi-family units once they age past 15 years.
San Jose has no local rent ordinance, which often leads investors to assume it's fully deregulated. But a 2005 apartment building in San Jose turned 20 years old in 2025 — it is now subject to AB 1482's statewide cap (5% + local CPI, max 10%) and just-cause eviction requirements. "No local ordinance" does not mean "no rules" once the building ages.
Curious about investment properties in any of these cities? Call or text (510) 277-4420 and I'll walk you through which rules apply before you make an offer.
How to Determine Your Building's Exemption Status (Step-by-Step)
The most common landlord mistake is relying on a sale listing, the county assessor's "year built" field, or a previous owner's word to determine exemption status. The correct source is always the certificate of occupancy (C of O) date from official permit records. Here is the correct process:
- Locate the certificate of occupancy date through county permit records. In San Francisco, use the SF Planning Department's online permit records or the SF Property Information Map at sfplanning.org. In Alameda County (Oakland, Berkeley, Fremont), use the county assessor's parcel viewer or the city's permit portal. In Santa Clara County (San Jose, Mountain View, Palo Alto), use the county assessor's website. You want the C of O date — not the sale date, not the renovation date, not the "year built" on Zillow.
- Compare the C of O date to the applicable local cutoff. If the C of O was issued on or after the local cutoff date (e.g., June 13, 1979 in SF, or July 1, 1983 in Oakland), the unit is exempt from the local rent cap. If the C of O pre-dates the local cutoff, the local ordinance applies.
- Confirm property type — condo, SFR, or multi-family. If the unit is a condo or single-family residence, it may qualify for an additional Costa-Hawkins exemption regardless of build date — but only if proper written notice was given to the tenant before the tenancy started. If no notice was given, this exemption is likely waived.
- Check for local just-cause eviction requirements separately. This is independent of the rent cap analysis. Oakland's just-cause ordinance (Measure JJ) applies citywide regardless of build date. SF's just-cause requirements apply broadly to covered units. Even a building that is 100% exempt from local rent caps may still require just cause for eviction under local law or AB 1482.
- Verify directly with the local rent board before taking any action. Contact the SF Rent Board (415-252-4602), Oakland's Rent Adjustment Program (510-238-3721), or Berkeley Rent Board (510-981-7368) to confirm your property's status in writing. Rent boards maintain databases of covered units and can tell you definitively whether a unit is registered, exempt, or in dispute.
- Consult a landlord-tenant attorney before acting on exemption assumptions. Especially for condo notices, owner-occupancy claims, or any planned rent increases that rely on Costa-Hawkins exemption status. The cost of a 30-minute attorney consultation is trivial compared to the cost of defending a rent board complaint.
County assessor records and MLS listings frequently show a "year built" that does not match the certificate of occupancy date. Buildings that were renovated, converted, or phased in multiple stages may have permit records that span several years. Always pull the actual C of O from permit records — do not rely on assessor or MLS data for legal determination of exemption status.
Need help pulling permit records or verifying exemption status for a Bay Area property you're considering? I do this as part of my multifamily investment consultation. Call (510) 277-4420 — I'll help you navigate the records before you make any decisions.
Vacancy Decontrol: The Reset Nobody Talks About
Before Costa-Hawkins, some Bay Area cities experimented with vacancy control — keeping rent frozen even between tenants. A building could stay at 1970s rent levels indefinitely, even as the tenant population turned over. Costa-Hawkins killed that. Under vacancy decontrol, every time a tenant voluntarily vacates, the rent clock resets to market.
Here's why this matters practically: in SF and Oakland, where many buildings have long-term tenants paying 40-60% below market, the value of that vacancy is enormous. If a tenant paying $900/month in a unit that now rents for $2,800/month voluntarily moves out, the landlord can immediately offer the unit at $2,800 — and then future increases are capped at CPI. Investors who buy rent-controlled buildings with below-market tenants are betting on vacancy events as part of their return calculation.
Vacancy decontrol is also what makes rent-controlled buildings in SF and Oakland so complex to value. The "as-is" rent roll drastically understates long-run revenue potential for a building with long-term below-market tenants. Buyers and sellers use different methods to value that optionality — some use probability-weighted vacancy projections, others use discounted cash flow models with assumed turnover timelines. Neither is exact, which is why tenant-occupied rent-controlled buildings trade at wide bid-ask spreads.
The Mechanics of a Vacancy Decontrol Event
When a tenant voluntarily vacates a rent-controlled unit, the process unfolds as follows. The landlord verifies that the departure is genuinely voluntary — not the result of any constructive eviction or landlord-induced pressure. The landlord then markets the unit at a new market-rate rent. The new tenancy begins at the new rent. From that point forward, future annual rent increases are capped under the local ordinance (SF: 60% of CPI; Oakland: CPI). The clock resets — but the cap resumes immediately upon the new tenancy.
One critical note: vacancy decontrol only applies to voluntary vacating. If a landlord evicts a tenant, even for a just-cause ground like non-payment, the landlord typically cannot use that eviction to trigger vacancy decontrol and raise rent to market. The just-cause eviction provisions in SF and Oakland are designed specifically to prevent landlords from engineering vacancies to take advantage of this reset.
Courts and rent boards scrutinize "voluntary" vacancies closely. A tenant who feels pressured or harassed into leaving can claim constructive eviction — which is treated as an involuntary departure. Landlords who try to pressure tenants out to trigger vacancy decontrol face harassment claims and severe penalties under both SF and Oakland law. Document every tenant interaction carefully. Never pressure, threaten, or financially incentivize a departure in ways that could be construed as coercive.
What Costa-Hawkins Does NOT Cover: Just-Cause Eviction
This is the point where most Bay Area landlords get confused — and where the confusion can be expensive. Costa-Hawkins is a rent cap law, not an eviction law. It limits local governments' ability to control rent increases. It says nothing about eviction standards.
In Oakland, just-cause eviction requirements apply citywide — including to buildings built after 1983 that are completely exempt from Oakland's rent caps under Costa-Hawkins. You can own a brand-new 2024 construction building in Oakland and still be required to have just cause to terminate a tenancy. Oakland's Measure JJ (2016) extended just-cause protections to units that were already Costa-Hawkins exempt from rent caps.
In SF, just-cause requirements similarly extend broadly to most rental units regardless of build date. The SF Rent Ordinance's just-cause protections apply to rental units that have been occupied by a tenant for at least 12 months, covering most multi-family buildings regardless of whether they're subject to the rent cap provisions. The practical effect is that SF landlords own buildings of two types: (1) buildings subject to both rent cap and just-cause, and (2) buildings subject to just-cause only. Very few SF buildings are genuinely free of both.
In Berkeley, the Rent Stabilization Ordinance also extends just-cause protections broadly, covering units not subject to Berkeley's rent cap in many circumstances. And AB 1482, the state law, adds just-cause requirements on top of its rent cap provisions for multi-family units older than 15 years in cities without stronger local protections.
Bottom line: a property being Costa-Hawkins exempt from rent caps does not mean you can evict at will. You need to know both which rent cap law governs (if any) AND which just-cause eviction law governs. They are separate questions with separate answers.
Question 1 (Rent Cap): Is this unit subject to a local rent ordinance or AB 1482? If yes, you have annual increase limits. If no, you can raise freely. Question 2 (Eviction): Is this unit subject to just-cause eviction requirements under a local ordinance or AB 1482? If yes, you need cause to terminate. If no, you can give proper notice without stating a reason. These two questions must be answered independently — the answer to one does not determine the answer to the other.
How AB 1482 Interacts with Costa-Hawkins
AB 1482 (the Tenant Protection Act of 2019) added a statewide layer that didn't exist before. It caps rent increases at 5% + local CPI (max 10%) for units not covered by a local ordinance that are older than 15 years. It also requires just-cause for eviction for covered units. AB 1482 has its own exemptions — single-family homes (with proper notice), condos (with notice), new construction under 15 years old, and properties in cities with stricter local ordinances.
In practice for the Bay Area: AB 1482 fills the gap for units that are Costa-Hawkins exempt from local rent caps but still old enough to be subject to state rent caps. A 20-year-old building in San Jose with no local rent control ordinance is not subject to SF's rent control, not subject to Oakland RAP — but IS subject to AB 1482's 5% + CPI cap (once the 15-year exemption period expires) and just-cause requirements.
AB 1482 also interacts with local ordinances in a specific way: if a local ordinance is more protective of tenants than AB 1482 (which is true for SF, Oakland, and Berkeley), the local ordinance governs and AB 1482 does not apply as an additional layer. AB 1482 is a floor, not a ceiling — it sets the minimum statewide standard, and stricter local laws supersede it.
| Scenario | Rent Cap Source | Just-Cause Source | Annual Increase Limit |
|---|---|---|---|
| Pre-1979 SF multi-family unit | SF Rent Ordinance | SF Rent Ordinance | ~1–2% (60% of CPI) |
| Post-1995 SF multi-family unit (under 15 yrs) | None | SF just-cause may still apply | Unrestricted |
| Post-1995 SF multi-family unit (over 15 yrs) | AB 1482 (if not in local scope) | SF just-cause may still apply | 5% + CPI, max 10% |
| Pre-1983 Oakland multi-family unit | Oakland RAP | Oakland Measure JJ (citywide) | CPI (~1–3%) |
| Post-1983 Oakland multi-family unit (any age) | None (Costa-Hawkins exempt) | Oakland Measure JJ (citywide) | Unrestricted (rent cap); just-cause required (eviction) |
| 20-year-old apartment in San Jose | AB 1482 | AB 1482 | 5% + local CPI, max 10% |
| 10-year-old apartment in Fremont | None (under 15 yrs) | None | Unrestricted |
| SF condo (with proper pre-tenancy notice) | None (Costa-Hawkins exempt) | SF just-cause may still apply | Unrestricted (rent cap); verify just-cause |
Step 1: Is there a local rent ordinance that covers this unit? If yes, local law governs. If no, go to Step 2. Step 2: Is the unit older than 15 years and not otherwise exempt? If yes, AB 1482 applies. If no, no rent cap. Step 3: Is there a just-cause requirement from either a local ordinance or AB 1482? This applies separately from rent caps — you must answer this question even if there is no rent cap.
Questions about how these overlapping laws affect a specific building? Call me at (510) 277-4420 — untangling this complexity is exactly what I do for Bay Area investors before they close escrow.
The Investment Math: Below-Market Rents and Vacancy Events
Understanding Costa-Hawkins is not just a compliance exercise — it is the foundation of Bay Area multifamily investment analysis. The relationship between current rents, market rents, and vacancy decontrol rights drives the economics of nearly every rent-controlled building transaction.
The Below-Market Rent Premium
When a buyer purchases a rent-controlled building in SF or Oakland with long-term tenants paying significantly below market, two values exist simultaneously: the "as-is" value based on current rent roll and the "potential" value based on market rents. The delta between these two figures can be enormous in high-cost Bay Area markets.
Consider a hypothetical 6-unit building in San Francisco's Mission District. Suppose the current rent roll averages $1,450/month per unit, while market rent for comparable units in the building is $3,200/month. On an as-is basis, the building generates roughly $104,400 in annual gross rents. At market rents, the same building would generate $230,400. The difference — about $126,000 per year — represents the "vacancy decontrol upside" that sophisticated investors price into their underwriting. Whether and when those vacancies occur is the key uncertainty.
Investors use various methods to value this upside: some apply a probability-weighted vacancy scenario model, assuming a percentage of units vacate per year and the discounted value of future market rents is calculated. Others apply a "cost to stabilize" framework, estimating how many years of natural turnover it would take to bring the rent roll to market and discounting accordingly. Neither method is standardized — which is why rent-controlled buildings attract both aggressive buyers (who believe turnover will happen faster) and cautious buyers (who assume long-tenured residents stay indefinitely).
How Exemption Status Changes the Cap Rate Calculation
Post-1995 buildings in the Bay Area — which are entirely exempt from local rent caps under Costa-Hawkins — trade on fundamentally different economics. Without a rent cap, annual increases can match market conditions. There is no below-market rent discount, no vacancy decontrol premium to model, and no tenant exit risk from the landlord's perspective. These buildings trade on clean, stabilized cap rates with conventional multifamily underwriting.
The flip side: post-1995 buildings in Oakland are still subject to Oakland's citywide just-cause eviction requirements under Measure JJ. Landlords cannot evict tenants at will even in buildings that are 100% exempt from rent caps. This creates a hybrid situation — market-rate rents but protected tenancies — that affects how these buildings are managed and valued. If AB 1482 also applies (buildings aged 15+ years), even the rent increases are capped at 5% + CPI despite there being no local rent ordinance coverage.
Before making an offer on any Bay Area rental building, run the exemption analysis: C of O date, local cutoff, current rents vs. market, AB 1482 applicability, and just-cause exposure. This is the first step in every investment consultation I do. Call (510) 277-4420 to start the analysis on a specific property.
The Political Future: Repeal Risk for Costa-Hawkins
California voters twice rejected measures to weaken Costa-Hawkins — Proposition 10 in 2018 (61% against) and Proposition 21 in 2020 (59% against). Both were backed by tenant advocacy groups and would have expanded local governments' ability to apply rent control to newer buildings and single-family homes.
The rejections were decisive but not overwhelming. The Bay Area, where rent control sentiment is strongest, voted yes on both. Statewide, rural and suburban California voted no. As long as that geographic split holds, Costa-Hawkins appears safe from ballot repeal. Legislative repeal is also possible but would face significant political resistance from the real estate and construction industries, which argue that expanding rent control would reduce new housing supply in a state already facing a severe housing shortage.
The housing shortage argument is actually one of Costa-Hawkins's strongest political protections. The state has set ambitious housing production targets under the Regional Housing Needs Allocation process, and expanding rent control to new construction would likely discourage market-rate development — which conflicts with state housing goals. This political tension between tenant advocates and housing production advocates is likely to keep Costa-Hawkins intact in its current form for at least the near term.
If you're making a long-term investment in Bay Area real estate — especially in a newer building — your underwriting should acknowledge that Costa-Hawkins is a political construct that could change. It's not as permanent as Prop 13 (which requires a constitutional amendment to overturn). If it were repealed, cities like SF and Oakland could immediately extend rent control to all buildings regardless of age.
If Costa-Hawkins were repealed and SF extended rent control to all buildings, the value of post-1979 SF rental buildings would decline materially — the premium for newer, uncontrolled buildings would disappear. New construction investment would also face increased risk from day-one rent cap exposure. This is a tail risk worth modeling in any Bay Area multifamily underwriting — particularly for longer-hold investment strategies where legislative change over a 10-15 year horizon is a realistic scenario.
Costa-Hawkins Quick Reference Cheat Sheet
Frequently Asked Questions
Related Resources
Questions About Your Bay Area Property's Status?
I'll tell you exactly which laws apply to your specific unit before you make any decisions.
- Free property exemption analysis — rent cap status by city and build date
- Vacancy decontrol modeling for below-market rent-controlled buildings
- Just-cause eviction exposure review for SF, Oakland, and Berkeley
- Exit strategy planning for rent-controlled landlords
- Pre-purchase investment analysis for Bay Area multifamily buyers
