A Federal Lawsuit in Oakland Could Reverberate Throughout California and Rewrite the Rules of Rent Control
There’s a case brewing out of Oakland that deserves every housing provider’s attention, not just locally. At first glance, it looks like a narrow disability-access claim, but in reality, it could upend one of the pillars of California rent control: the exemption for newer construction under the Costa-Hawkins Rental Housing Act. Let’s break it down.
The case we are talking about is Smith v. City of Oakland, a federal class action brought on behalf of renters with mobility disabilities. Filed on August 28, 2019, by Disability Rights Advocates (DRA) and the Public Interest Law Project (PILP), this federal class action argues that Oakland’s Rent Adjustment Program —better known as rent control— effectively discriminates against tenants with mobility disabilities, even though on its face the rule seems neutral.
To understand why this case could "rewrite the rules," we have to look at the hierarchy of laws at play:
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The Federal Mandate (1988/1991): The Federal Fair Housing Amendments Act began requiring new multifamily buildings to be physically accessible (wide doors, elevators, reinforced walls for grab bars) in the early 1990s.
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The State Shield (1995): The Costa-Hawkins Rental Housing Act is a California law that protects "new construction" from rent control. In Oakland, this protection applies to anything built after 1983.
The plaintiffs in Smith argue that because accessible housing is almost exclusively "new" housing, disabled tenants are systemically excluded from the financial protections of Oakland’s rent control.
Imagine a city library where all books printed before 1980 are free, but books printed after 1980 cost $50 to check out. Now, imagine that the library only started printing books in Braille in 1990. On the surface, the "1980 rule" applies to everyone. However, in practice, the only people forced to pay the $50 fee are those who are blind, because the books they need physically didn't exist before the cutoff.
The plaintiffs in Smith argue that Oakland’s rent control is exactly like that of the library.
Here’s the rub: Most accessible units are newer. Most newer units are exempt from rent control.
Equal Access, But at What Cost?
The plaintiffs’ theory is straightforward, but far-reaching. They’re not arguing that everyone is entitled to rent control. Instead, the class action—brought by three renters who rely on mobility devices—contends that if a city offers a rent-controlled housing program, it must be accessible on equal terms to people with disabilities.
And if the only accessible units are exempt from that program? Then, in their view, something has to give, even if that means overriding long-standing state law.
Let's not sugarcoat it. If this argument gains traction, it doesn't just tweak the system. It fundamentally rewrites it.
The exemption for newer construction isn’t a technicality. It’s the backbone of how rent control has functioned in California for decades. The policy tradeoff has always been clear: regulate older housing, but leave new development alone to encourage supply. Pull that thread, and the sweater starts to unravel.
Expanding rent control to newer units would:
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Pull in housing never meant to be regulated: Thousands of post-1983 units long carved out to encourage development would suddenly fall under price controls, upending the original policy balance.
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Reshape rental economics across a wider market: Owners of newer properties would face capped increases, reduced revenue projections, and potential valuation impacts—effects that ripple into financing, refinancing, and long-term investment decisions.
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Extend beyond a narrow fix to a system-wide shift: What begins as an access-based argument risks becoming a broad expansion of regulation, applying to units regardless of whether they are occupied by tenants with disabilities.
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Create uncertainty for future development: Developers rely on predictable rules. Changing the treatment of new construction midstream could chill new housing starts at a time when supply is already constrained.
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Invite copycat challenges in other jurisdictions: If successful, the theory could be replicated in cities across California with similar rent control frameworks, amplifying the impact well beyond a single case.
Most importantly, risks chilling new construction at a time when California can least afford it.
Where the Lines Are Drawn
Strip away the framing, and this case comes down to one question: how far does the law go? Federal disability laws certainly require meaningful access, and there is no dispute there. But traditionally, that obligation has been about reasonable accommodations, not rewriting entire regulatory systems. What’s being tested here is whether that boundary still exists.
If “equal access” is interpreted to mean reworking the core structure of rent control—and overriding long-standing state law—we’re no longer talking about accommodation. We’re now venturing into a fundamental shift in housing policy.
Rent control in California has long been built on a tradeoff between regulating older housing and exempting newer construction to encourage development. If a court requires cities to extend rent control to those newer units in the name of equal access, that balance disappears. It doesn’t just adjust the margins—it expands the scope of rent control itself, potentially overriding state law, altering investment expectations, and opening the door for similar challenges in other jurisdictions.
A hearing is scheduled for May 28, and if history is any guide, what happens in one courtroom rarely stays there. Of course, Bornstein Law will be following the case and will keep you plugged in. Subscribe to our regular email updates to stay in the know.