Costa–Hawkins Rental Housing Act

The thing that makes the market feel broken is what happens when someone moves out.

In 1995, California passed a law called Costa-Hawkins.

Among other things, Costa-Hawkins required that when a rent-controlled apartment is vacated, the landlord can raise the rent to whatever the market will bear for the next tenant.

That means that every rent-controlled apartment has two prices.

what the person inside pays, and what the apartment is worth.