Proposition 33 would eliminate an existing law that limits the ability of local governments to control residential rent increases. It would lift rent control limits established in the 1995 Costa-Hawkins Rental Housing Act.
Affordable housing advocates are divided on whether voter passage of Proposition 33 will relieve or exacerbate California’s current housing crisis.
Overall, renters in California pay about 50% more for housing than renters in other states. In some parts of California, the cost is twice the national average. The shortage of housing is a root cause of these high rental rates.
Some California cities and counties have adopted local rent controls to curb increases. But existing state laws limit local rent control measures. One law, which expires in 2030, prevents most landlords from increasing a tenant’s rent by more than 5%, plus inflation (up to a total of 10%) in a year.
The Costa-Hawkins Act limits local rent control laws in three main ways — rent control laws cannot apply to single-family homes; they cannot apply to housing built after 1995; they can’t dictate what a landlord charges a new renter. They can only limit rent increases for existing renters.
Proposition 33 eliminates Costa-Hawkins and allows cities and counties to control rents for any housing. Limits can apply when a new renter just moves in. Counties and states could pass their own rent controls beyond existing state limits. The state would be prohibited from taking future actions to limit local rent control.
The effects of Proposition 33 are hard to assess. Some renters who live in properties covered by rent control might spend less on rent. Some renters who live in properties not covered by rent control might spend more on rent.
Some renters might move less often. Therefore, fewer units would be available to rent. Some landlords might sell their properties to new owners, rather than renting them out.
The value of rental housing might decline because potential landlords would not want to pay as much for rental properties, when the returns on their investments are low. That could reduce the amount of available rental units and reduce the amount of property taxes collected to fund local public services.
If local governments expand their rent control programs, the cost of administering these programs also will increase.
With so many uncertainties, voters should reject Proposition 33. Rent control should be a local decision. However, the state also should have a voice in determining how far these controls can go. VOTE NO.