Editorials

Prop 33 isn’t reasonable.

It goes beyond simply repealing Costa-Hawkins. It also explicitly blocks the state from limiting the ability of local governments to “maintain, enact or expand residential rent control.”

According to Chris Elmendorf, a UC Davis law professor and California housing law expert, this clause is a Trojan horse that local governments could exploit to make it nearly impossible to build new housing. That’s because courts, including the California Supreme Court, have interpreted “rent control” to include price controls established through inclusionary housing ordinances, which require a certain percentage of units in a development to be affordable.

Supporters say this is intended to protect local decision-making on key housing policies.

But that’s a recipe for disaster. Because, unfortunately, as we know all too well here in San Francisco, most local California governments can’t be trusted on housing.

The evidence is overwhelming that rent control is counterproductive. This view isn’t just held by free-market acolytes. Nobel Prize-winning economist Paul Krugman, the progressive columnist for The New York Times, has written that “rent control is among the best-understood issues in all of economics, and — among economists, anyway — one of the least controversial.”

Surveys have routinely shown that virtually all economists agree that “a ceiling on rents reduces the quality and quantity of housing,” as the American Economic Association noted in 1992.

The San Diego Union-Tribune Editorial Board urges a “no” vote on Proposition 33.

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.

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.

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.

Prop. 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.

Expanding rent control would only exacerbate the state’s housing crisis. Which is why voters should reject Proposition 33 on the Nov. 5 statewide ballot.