These are some of the issues behind California’s housing crisis
The futility of the California Assembly’s frenzied effort to address high housing costs is best illustrated by this language in Assembly Bill 1482, passed to impose rent control statewide: “This section is intended to respond to the unique circumstances of the current housing crisis, and to only apply for a limited time.”
There is nothing temporary about our state’s housing crisis. It is the deliberate result of policies that governments at all levels have pursued since the early 1950s. And the short-sighted, simplistic approach taken by the Assembly could ensure it lasts for decades to come.
The shortage of affordable rental housing has been engineered and nurtured year after year by tax policies and local land use regulations. Let me spell it out for you: Local governments don’t want low- and moderate-income people to make up any larger percentage of their population than absolutely necessary. Most of them don’t want any significant increase in the supply of high-density rental housing.
Local politicians have reasonable sounding rationales for why they hate rental housing, but they all know that the harder they fight against it, the more affluent and middle-class homeowners will reward them come election time.
Landlords in supply-constrained markets make the perfect scapegoats. Local governments get two benefits by blaming them for high rents. They get to create new bureaucracies to regulate rents and evictions, which means more fees and jobs to fill. Plus, they dupe lower-income people into thinking the housing problem is being addressed. They escape responsibility for the deliberate results of their own anti-housing policies.
I was a journalist covering housing policy, an advocate for affordable housing and the author of two books on the topic. I now own a small number of rental housing properties. I know that the vast majority of landlords are mom-and-pop owners who don’t set out to gouge their tenants or evict them for no reason. It is a very small percentage of owners who push things too far out of greed.
But no landlord of any size in any city could get away with raising rents aggressively without the complicity of local governments. By constraining supply, governments give owners carte blanche to raise rents. More construction would be a permanent solution to runaway housing costs for ownership as well as rentals. It requires no bureaucracy and no lawyers to write regulations. It’s primarily politics that gets in the way.
Instead of encouraging construction of more apartments, the Assembly has declared rent control to be a statewide goal, which will further reduce how much new housing is built. If the Senate passes AB 1482, it will drive investment away from California housing for many years to come.
Even if statewide rent control fails to become law, the Assembly has already warned apartment owners to protect themselves by jacking up rents ASAP and cutting spending on maintenance and improvements. It has encouraged more local governments to act on their own to try to restrict rents even as they impose more and more costs on housing owners.
So, far from being temporary, the Assembly’s decision to intervene in the market is a fundamental change that will mean a worsening crisis for decades to come. Don’t be surprised when it leads to a resurgence of badly-maintained “slum housing” in a flashback to the 1950s and 1960s.
I must admit, I can’t blame the anti-housing crowd from having a good laugh. With the help of the Assembly, they have largely won their battle to prevent low-income renters from living in their towns, and they managed to pin the blame for the housing crisis on landlords.