Few phrases in California politics are more likely to send people scurrying to their respective corners than “rent control.”
One side is convinced that capping rental prices in more cities will bring housing construction to a screeching halt, worsening the affordable housing crisis. The other side believes that rent control will save struggling families from the certainty of spending even more of their income on housing and prevent them from becoming homeless.
Proposition 10, which would repeal the Costa-Hawkins Rental Housing Act, has become the latest proxy for this ever more polarized debate. But neither is the right way to look at the Nov. 6 statewide ballot measure.
Despite the hype — of which there is plenty, thanks to tens of millions of dollars being spent by developers and property companies to kill it and by Michael Weinstein’s AIDS Healthcare Foundation to promote it — Proposition 10 isn’t really about rent control.
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It’s about local control, which is why we recommend Californians vote “yes.”
If approved, Proposition 10 would upend more than two decades of public policy, under which cities and counties have been banned from enacting or expanding ordinances to restrict rents on housing first occupied after Feb. 1, 1995, and on any single-family homes. More than a dozen California cities, including Berkeley, Los Angeles, Oakland and San Francisco, already have some version of rent control on the books.
Under the measure, which has been endorsed by the California Democratic Party, city councils and county boards of supervisors would be free to regulate rental prices on any type of housing within their boundaries, as well as limit how much a landlord can charge when a new tenant moves in.
While, to some, that might sound like a recipe for obliterating California’s housing market, voters should know that Proposition 10 doesn’t automatically enact or strengthen rent control ordinances.
Cities and counties must do that themselves — or can choose to do nothing at all. This is why voters should see Proposition 10 through a nuanced rather than a polarized lens.
City councils and boards of supervisors clearly understand the needs of their constituents best, and with solutions only starting to trickle out of the state Legislature, they deserve the freedom to experiment — responsibly — with creative ways to help vulnerable tenants and energize the housing market. They also deserve the chance to come up with the right plan before having to deal with local ballot measures imposing rent control.
For example, Sacramento Mayor Darrell Steinberg wants to impose a temporary, 5 percent annual cap on rent increases for apartments built before 1998, combined with the elimination of fees for developers. Los Angeles County supervisors, meanwhile, recently voted for an even stricter 3 percent temporary freeze on rent increases and a requirement that landlords have a legitimate reason for evictions.
There is some reason to believe these plans may not work. A new study from UC Berkeley economist Kenneth Rosen says as much. Rent control — particularly when it’s not paired with any incentives for developers — is no panacea.
It can have a chilling effect on new construction, potentially making the state’s already pronounced housing shortage even worse. It can encourage tenants to stay in rental units rather than moving, further shrinking the housing supply. It also can put mom and pop landlords in a financial bind, gutting the long-term value of their rental properties and discouraging them from making investments in renovations.
That is why our support for Proposition 10 is not driven by a blind belief in traditional rent control. To the contrary, we have historically opposed such strict limits. Therefore, if the ballot measure passes, we urge cities and counties to start small and be cautious if they do take up local measures to protect tenants.
But what’s most important is that these conversations about short-term strategies are happening at all. While increasing the supply of housing is the long-term solution, that will take years that California doesn’t have.
Already, the state is home to nearly 25 percent of the nation’s homeless population — not because they came here for the good weather, but because native Californians increasingly can’t afford to keep a roof over their heads. What’s worse, 66 percent of those estimated 134,000 people live outside instead of in shelters — the highest rate in the U.S.
At the same time, the housing crisis is driving thousands of young, educated, middle-class workers to relocate to cheaper states, threatening California’s economy. Since the end of the Great Recession, the state has lost a net half-million people and, currently, about 140,000 a year.
Nearly half of all Californians and a majority of renters say housing costs are a financial strain, and California’s poverty rate remains the highest in the nation, according to the Census Bureau.
It no longer makes sense to tie the hands of local officials in dealing with this crisis, especially when they’re also being left to deal with the financial and humanitarian consequences of rising homelessness.
California needs a mix of both short-term and long-term solutions.
It took the threat of Proposition 10 to start serious discussions of short-term solutions. Minor attempts to help tenants were routinely blocked by deep-pocketed lobbying efforts. It’s time to tilt the power dynamic of this polarizing debate back to the control of local officials. Passing this measure will do that.