A federal lawsuit in Oakland could reshape rent control across California and dismantle Costa-Hawkins, a key state law that protects housing providers, by testing whether federal disability law could require cities to extend rent control to newer housing that has long been exempt from such limits.

The California Apartment Association is urging a federal judge to reject that approach, filing a brief this week as an amicus curiae, or “friend of the court,” to highlight the broader housing policy implications.

The case—Smith v. City of Oakland—is filed in federal court. Brought as a class action by a group of renters with mobility disabilities, it centers on a mismatch between several laws enacted years apart. Federal fair housing rules have required most multifamily housing built since 1991 to include accessibility features. But Oakland’s rent control ordinance applies only to housing built before 1983, meaning most accessible units fall outside the program. That 1983 cutoff is reinforced by the Costa-Hawkins Rental Housing Act, a state law that limits how far local governments can reach with their rent control programs—including a provision that prohibits local governments from adjusting preexisting new construction exemptions.

Plaintiffs argue that this dynamic effectively denies renters who require accessible housing meaningful access to the city’s rent control program. Their claim is not that they are entitled to rent control itself, but that if a city offers such a program, federal disability law requires it to be accessible on equal terms—even if that requires overriding Costa-Hawkins.

The City of Oakland has opposed the plaintiffs’ lawsuit and is defending its local program. But it is not an advocate for Costa-Hawkins, leaving the broader statewide implications largely unaddressed in the case. That gap is what CAA has stepped in to fill.

CAA argues the plaintiffs’ proposed fix goes too far. The association says expanding rent control to thousands of newer units would carry a steep price tag, sweep far more broadly than necessary, and undermine long-standing state law designed to encourage new housing construction.

Drawing on the plaintiffs’ own evidence, CAA estimates that bringing those units under rent control could translate into tens of millions of dollars in reduced rental income each year, with costs spread across the broader housing market. At the same time, CAA argues, the proposal would apply broadly to units rented by both disabled and non-disabled tenants, rather than being narrowly tailored to address the access issue at the heart of the case.

CAA also warns that extending rent control to newer construction would undercut a central feature of both the local law and Costa-Hawkins: exempting new housing in order to promote development. Changing that structure, the association argues, would inevitably discourage new construction at a time when California’s housing supply is already critically constrained.

Taken together, CAA contends, those impacts go beyond what federal law requires. While disability laws call for reasonable modifications to address access issues, they do not require changes that fundamentally alter the nature of a program or override core features of state housing policy.

For housing providers across California—and potentially nationwide—the stakes are significant. New construction exemptions are a cornerstone of rent control systems throughout the state and are protected by Costa-Hawkins. A ruling requiring those exemptions to be set aside could invite similar challenges in other cities and reshape how rent control is applied to newer housing.

The federal court is expected to consider the matter at a hearing scheduled for May 28.