Currently, only California and Oregon have statewide rent control laws on the books. California’s law, AB 1482, also known as the California Tenant Protection Act, was passed in 2019. Under current state law, rent can either go up 5% plus yearly inflation or 10%, whichever is lower. While some local rent control laws go even further, such as having yearly rises be limited to only 4% or less, the 5%/10% law has held firm.
However, there are also major exemptions to the statewide law. The largest of which, the Costa-Hawkins Rental Housing Act, specifically prohibits rent control from being placed on single-family homes and apartments built after 1995, as well as prohibiting vacancy control and allowing landlords to reset rent to a different price once a renter moves out. For years, these limitations have irked rent control and affordable housing advocates, while proponents have said that the law is needed to help encourage new housing to be built.
The rent control proposition, which currently does not have a number assigned to it, will specifically repeal the Costa-Hawkins Rental Housing Act. In addition, the proposition will clarify that the state may not limit the right of cities and counties to maintain, enact, or expand rent control. However, the state would still keep statewide measures in place.
Michael Weinstein, the current head of the AIDS Healthcare Foundation who helped fund the latest ballot signature drive, said on Thursday that “The situation has gotten so extreme and dire and catastrophic. Rates of homelessness are going up. Where are people going to live? That’s the question.
“The rent limits of the Justice for Renters Act don’t go far enough. This is the root cause of the homeless and affordability crisis in California. The California dream is dying.”
Unite Here Local 11 Co-President Ada Briceno, whose union supports the measure, also noted that “Many of our members are the working poor. They live paycheck to paycheck. They’re couch surfing. They’re living in their cars and struggling to pay rent. Many of them have been pushed out of their communities and now have long hours of commute.”
However, landlord groups such as the California Apartment Association (CAA) and the Apartment Owners Association of California (AOAC) noted that, if approved by voters, the expanded rent control bill would be disastrous for renters across the state.
“If this measure passes, landlords lose any hope of ever charging fair market value for their investment,” explained CAA Chief Executive Tom Bannon. “There is little incentive to keep the unit on the market, let alone invest in improvements.”
President of the AOAC Jeff Faller added that “People who signed that, I don’t know that they fully understand the impact. It will actually make things worse. Because it’s not creating more housing, it actually creates a shortage and so, the less of something you have, the more expensive it becomes, so it’s not helping them in any way.”
Analysts noted that both sides will be pouring a lot of money into their respective campaigns for or against the proposition for the next 15 months.
“The 2018 and 2020 ballot attempts were dismal failures for rent control expansion supporters,” political advertising consultant Jayson Hibbert told the Globe on Friday. “Supporters lost both times by over 20%. Naturally, with many struggling to pay rent and a bigger voter turnout expected next year, they hope to change things. But it will cost them.”
“Combined, the AIDS Healthcare Foundation and supporters spent $60 million in the campaign, with landlord groups spending $100 million each time. That’s a huge difference, and we’re bound to see those high numbers again. A lot is at stake for both sides. For those renting in an older building or own a home, it is simply a non-issue. But for many renters of newer apartments and homes, and landlords of them, it is a huge issue.”
The rent control proposition expansion is set to be on the ballot in November of next year.