Rent control proponents suffered a major defeat Tuesday, as California rejected Proposition 10, the initiative that sought to give cities more power over local rent control laws.
Painted by backers as a critical tool for cities and counties across California to prevent massive rent increases and forestall tenant displacement in the middle of an unprecedented statewide housing crisis, the initiative sought to repeal the Costa-Hawkins Rental Housing Act, which sets strict limits on rent control across California. It was losing Tuesday night, 62 percent to 38 percent.
The measure’s failure means Costa-Hawkins remains in place. The law prevents cities from strengthening existing rent control laws. Rent control cannot cover single-family homes, condos or any housing built after 1995. When a tenant vacates a rent-controlled unit, landlords are allowed to raise rents to whatever price the market will bear.
The defeat represents the biggest win in more than two decades for powerful California real estate interests, which pumped nearly $100 million into the campaign opposing the initiative — three times more than the pro-rent control side. At the heart of the battle was how to address California’s deep housing shortage, which has driven rents and home prices to record highs.
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Opponents argued rent control would diminish investment in new housing, aggravating the shortage. Their ads featured seniors, veterans and homeowners who said it would make “a bad problem worse.”
The biggest players — the California Apartment Association and the California Association of Realtors — have used their influence to kill past state tenant protection proposals, and to defeat local rent control measures in recent years.
Proponents of rent control said tenants’ rights activists made progress, despite their defeat.
“We’re often told that only San Francisco cares about this stuff...but the political focus of tenants in Los Angeles has been greater in this campaign than I’ve ever seen anytime in history,” said Randy Shaw, executive director of the Tenderloin Housing Clinic, a San Francisco-based nonprofit provider of affordable housing and other services.
Shaw said backing by Los Angeles Mayor Eric Garcetti, who endorsed the initiative, the California Democratic Party and powerful unions including the California Teachers Association and the Service Employees International Union will amplify efforts next year to pass renter protection measures through the state Legislature. He characterized the campaign in support of Proposition 10 as a starting point.
“It’s extremely difficult to get any tenant legislation through in Sacramento, but now that we have more officials in Los Angeles concerned about tenants, and we are seeing Mayor Eric Garcetti in support, we think that will translate on more pressure on Sacramento,” Shaw said. “There was no way a ballot measure to repeal Costa-Hawkins was going to win on its first try. Very few voters even knew what it was.”
Initiative backers, including the AIDS Healthcare Foundation and its president, Los Angeles housing activist Michael Weinstein, said they aren’t giving up.
“Despite being vastly outspent,” Weinstein said in a statement, “we succeeded in beginning a debate on housing affordability that will continue beyond this election in the legislature, in city councils, on the ground and on the ballot in 2020.”
Damien Goodmon, director of the AIDS Healthcare Foundation’s “Housing is A Human Right” campaign, said ballot initiatives in California can take years, “sometimes more than a decade,” to pursue. “The reality is that on November 7, people are going to start looking to 2020.”
Any future push could be overshadowed by the desires of the incoming governor, however. Lt. Gov. Gavin Newsom was the declared winner as election returns came in Tuesday.
He said he’s in favor of rent control, but opposed the initiative, arguing it could have a chilling effect on new housing construction. He said he intends to work toward a potential compromise with both sides, but will not support anything he sees as an impediment to the backbone of his housing agenda: Building 3.5 million more homes in California by 2025.
Sid Lakireddy, PAC chair for the California Rental Housing Association, which represents landlords, said the initiative’s failure “demonstrates that voters want a real solution to our affordable housing crisis.”
“This is not the end of the conversation,” Lakireddy said in a statement.
Steve Maviglio, a spokesman for the opposing side, argued that any efforts to reach a deal on tenant protections wouldn’t go far. He also expressed skepticism that the Legislature would support any proposal to strengthen laws shielding renters from evictions or large rent increases.
“When something loses by double-digits, that sends a strong message to politicians not to side with the losing faction,” Maviglio said. “What this shows is that most Californians don’t want to block construction of affordable housing, and they don’t like the thought of their homes being subject to draconian government controls.”