A lot of housing reforms have passed in California over the past five years, but the one that seems hardest to pull off is any change to the state’s condominium laws.

The state has a strict condo defect law designed to protect buyers, but it has put a chill on the condo construction market since its passage in 2002. Consumer advocate groups tend to defend the law strongly, but housing advocates want to see it changed.

A proposed Assembly bill aimed at condo defect lawsuits died in August in the state Legislature when it failed to get a vote before the session ended. The law would have made it easier for builders to defend against lawsuits.

The powerful lobbying group Consumer Attorneys of California opposed the bill, arguing it would have restricted valid lawsuits against builders.

The topic of condos has been raised recently in San Diego County as rents have been essentially flat for three years. Some have suggested several new apartment projects should be switched to condos before they hit the market as rentals. Despite the recent setback, some experts think affordability constraints may make legislative change possible, which could increase the for-sale housing supply.

Question: Is it politically possible to change California’s condo defect laws?

Economists

Kelly Cunningham, San Diego Institute for Economic Research

YES: In representative democracy, the rights and will of the people should prevail over powerful special interests lobbying. Market demand for affordable housing should not be hindered by legislative manipulation. Protecting buyers’ rights does not include overly rigid construction standards holding builders unendingly accountable. The nearly completed legislation should be reintroduced and promptly passed. Representatives deliberately obstructing the legislation from proceeding should be openly recognized and held responsible. Reasonable and sound judgment needs to guide reform.

Alan Gin, University of San Diego

NO: Consumer lawyers are too powerful and have too much money. They would block any reform attempts. That is unfortunate because more condos would help the housing market. The rental market has stabilized in terms of rent increases over the past few years, but owner-occupied housing prices remain very high. The high prices make it difficult for people to make down payments. Converting apartments to condos gives buyers lower-priced options to enter the owner-occupied market.

James Hamilton, University of California-San Diego

YES: These groundless lawsuits against builders are hurting everyone in California except for the trial lawyers. These lawyers are a formidable political force because of the money they pass back to the politicians. Legislation to reform construction-defect lawsuits unanimously passed both legislative chambers only to be scuttled by behind-the-scenes political maneuvering. Supporters of affordable housing need to keep a bright light shining on the legislative process. Corruption can only thrive when it hides in the dark.

Norm Miller, University of San Diego

YES: While reducing California’s condo-defect liability period would not overcome larger barriers such as CEQA, NIMBY opposition and lengthy approval processes, it would likely encourage more condominium development. Shorter liability periods could lower builders’ insurance and legal costs, potentially reducing buyer prices. Condo defect claims are particularly costly because HOAs can sue on behalf of all owners, turning a defect found in one unit into a large, quasi-class-action lawsuit that attracts specialized plaintiff firms.

David Ely, San Diego State University

YES: We can hope that change is politically possible. As growing numbers of aspiring first-time homeowners conclude that buying an entry-level home is beyond their reach, pressure rises on legislators to act. Mechanisms for resolving building defects in condos are needed. But strong demand for more affordable ownership housing should prompt legislators to shift the balance and give greater priority to lowering the legal risk to developers and increasing the supply of condos.

Ray Major, economist

YES: It must be done. The overregulation of the housing industry is the primary reason we are suffering a housing shortage and astronomical costs. Although some regulations are well-intentioned, each additional law passed creates another hurdle that must be jumped by developers. These regulations end up adding time and risk to projects, and those costs are passed on to home buyers. Reducing or eliminating these regulations would benefit San Diego residents’ ability to purchase and afford homes.

Executives

Phil Blair, Manpower

YES: It must be. Due to the price of housing, condos are the best alternative for homeownership. Condos are often the first step in gaining equity to buy a house. People need to understand that builders are not going to build a condo project knowing they will be sued at the 10-year point even though the building is in perfect shape. If we want housing production to move up, we need to remove unreasonable demands on developers.

Gary London, London Group Realty Advisors

YES: Not only is it politically possible, but it is probable. This year the state legislature almost approved a cleanup of long-term liability, which has sidelined architects, contractors and developers and has unequivocally tamped down critically needed condo construction for most of this century. New legislation putting California more in line with other states is coming in 2027. Stated another way, so far housing reform hasn’t resulted in much net increase. This reform would.

Bob Rauch, R.A. Rauch & Associates

YES: California’s housing crisis has created a very rare political alignment for condo defect-law reform. Lawmakers increasingly recognize that excessive litigation risk and insurance costs discourage condo construction and reduce homeownership opportunities. By preserving strong consumer protections while expanding builders’ rights to repair and reduce frivolous claims, California can increase housing supply. This will also improve affordability and encourage responsible development without sacrificing homeowner protection.

Austin Neudecker, Weave Growth

YES: California’s shortage of attainable homeownership options has brought renewed attention to condo construction. Current defect laws protect buyers from construction errors, but litigation risks have discouraged developers from building. Balanced reform need not eliminate those protections. Requiring clear documentation of defects and giving builders a remedy period could reduce litigation while preserving homeowners’ rights. AB 1903’s unanimous legislative votes demonstrate substantial support. San Diego must continue building housing.

Chris Van Gorder, Scripps Health

YES: California’s housing affordability crisis has created an opportunity for bipartisan reform of condominium defect laws. Current laws expose developers to costly litigation, discouraging construction. The key will be finding a reasonable balance between the interests of buyers and sellers. But California needs more pathways to homeownership, not rentals.

Jamie Moraga, Franklin Revere

YES: As with anything, it’s about finding middle ground that protects condo owners, works for builders and earns bipartisan support. Builders must be accountable for legitimate construction defects, while homeowners and HOAs shouldn’t bring unsubstantiated claims or lawsuits. A compromise could include long-term accountability for major defects, independent inspections, and faster, repair-focused dispute resolutions. Protections should safeguard owners without discouraging construction or driving builders out of the condo market. This could make reform politically possible and new-build condos a viable homeownership option again.

Mark Kersey, San Diego County Taxpayers Association

YES: Construction defect litigation reform can pass in Sacramento, but only if state legislators put the needs of their constituents ahead of the special interests who fund their campaigns. Defect litigation is a real impediment to condo construction, and condos fill an important need in the market for both young families and empty nesters. Reform can happen — it just needs “people over politics” to be something more than a campaign slogan.

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