California’s decades-long failure to build affordable and middle-class housing has created a crisis that has left renters feeling like second-class citizens. The question is whether abandoning state rent control laws for different solutions in each California city is the answer. It is not. That’s why Proposition 33 makes no sense and deserves a no-vote.
Prop. 33 is the third attempt in six years to expand rent control via the initiative process. (Voters rejected two previous attempts.) This time, supporters are touting a local control solution they hope appeals to more voters.
But taking rent control out of the hands of the Legislature may have some unintended consequences. The expanded rent control ideas proposed by backers are way outside core competence of local governments. Imagine your city setting the rent for every vacant apartment building or rental house in town and then charging mightily for its financial wisdom. That is what Prop. 33 would do.
This initiative is a single paragraph and straightforward for voters to understand: “Current state law (the Costa-Hawkins Rental Housing Act of 1995) generally prevents cities and counties from limiting the initial rental rate that landlords may charge to new tenants in all types of housing, and from limiting rent increases for existing tenants in (1) residential properties that were first occupied after February 1, 1995; (2) single-family homes; and (3) condominiums. The measure would repeal that state law and would prohibit the state from limiting the right of cities and counties to maintain, enact or expand residential rent control ordinances.”
The existing law has led to various rent control and tenant protection ordinances at the local levels. The city of Sacramento, as one example, limits rent increases to a third. State law has prohibited local governments from controlling the rents of single family homes and vacant rental units.
Backers dispute this, but research and history reveal problematic tradeoffs forced by strict local rent control restrictions. There’s a point where controls go so far as frustrating the construction of more housing, making the problem worse. If rent control expanded to single-family homes, the result could be less rental housing altogether: The owner could sell to a buyer who will occupy the unit, or the owner could switch to the short-term market and avoid price controls altogether.
A Huntington Beach-type locality that loathes more housing could exploit the lack of state oversight for poison pills. A city council that hates granny flats — otherwise known as “accessory dwelling units” — could mandate that they be occupied by low-income residents at a below-market rate. That poison pill would eliminate construction, resulting in fewer new housing units yet again.
The measure allows cities to collect fees from landlords to figure out how much their residences should be rented for. But this only adds to the cost of housing. City councils need to focus on building more housing of all types as opposed to getting into the business of setting every rent in town.
Prop. 33 is opposed by a long and bipartisan group of legislators, including Democratic Assemblymember Buffy Wicks of Oakland, one of the Legislature’s true champions at addressing the state’s housing crisis.
Backers like to frame the housing problem as evil corporate landlords against the rest of the impoverished world, but this vexing issue does not lend itself to caricatures. Solving the affordability problem is truly hard.
The existing statewide guidance on rent control is simply not the reason that California has fallen behind in its housing construction needs year after year. The real reasons are many: a proliferation of local fees, the abuse of environmental laws, rising costs of labor and materials, and a dearth of funds and incentives to build affordable units. None of the housing shortage’s true causes go away by passing Prop. 33.
There is room now for some reasonable controls at a local level if the leaders so choose. Eliminating a state role on this key issue is not how to get Sacramento more serious about solving the housing affordability problem.