California voters will be asked this fall to expand rent control with a statewide ballot measure similar to ones they wisely rejected in 2018 and 2020.
Supply-and-demand economic principles today are the same as they were six years ago. “Rent is high in California because the state does not have enough housing for everyone who wants to live here,” notes the state’s nonpartisan legislative analyst.
To address California’s housing crisis and hold down rents, the state needs to add supply by incentivizing more construction. But rent control discourages investment in new housing, constraining supply and driving up overall housing costs.
Which is why voters should reject Proposition 33 on the Nov. 5 statewide ballot.
No on Proposition 33
The state already has rent control. Until 2030, California law limits increases to no more than 5% plus inflation (up to a total of 10%) in a year.
In addition, local rent control laws cover about one-quarter of Californians. In the Bay Area, that includes residents of Alameda, Antioch, Berkeley, Concord, East Palo Alto, Half Moon Bay, Hayward, Larkspur, Los Gatos, Mountain View, Oakland, Richmond, San Anselmo, San Francisco and San Jose.
But under the state’s Costa-Hawkins Rental Housing Act, local governments can only limit rents for multi-unit apartment buildings constructed before Feb. 1, 1995. And they must allow landlords of those older buildings to reset rents to market rates for new tenants.
Proposition 33 would free local governments to set rent rules without restrictions. Cities could expand price controls to all types of units, including those built after 1995, and limit how much landlords could increase rents for new tenants.
“Neither of these changes would increase the supply of housing and, in fact, likely would discourage new construction,” the legislative analyst wrote in 2016 when that year’s similar ballot initiative was being contemplated.
Proposition 33 is so broad that key Democratic housing advocates, including state Sen. Toni Atkins, the party’s former leader in the Senate, and Assemblymember Buffy Wicks, D-Oakland, oppose it. They fear the measure grants autonomy to cities that they could use to undermine recent state mandates for more housing.
Indeed, some city leaders opposed to housing mandates are looking to Proposition 33 as an escape hatch. If it passes, they could set rent limits so strict that no developer would want to consider construction.
It would be an extreme example of the underlying principle: Expanding rent control would only exacerbate the state’s housing crisis.