Growing Opposition to California Ballot Measure That Would Remove Limits on Rent Control

Propmodo Daily

Greetings!

Proposition 33 aims to expand rent control in California but faces strong opposition from mayors and real estate groups who believe it would worsen the housing crisis. In today’s email, we explore why, despite support from tenant advocates, public backing is low, and how similar measures have failed in the past.

Now, let’s dig in!

Growing Opposition to California Ballot Measure That Would Remove Limits on Rent Control

A California ballot measure concerning rent control that will be up for a vote in November’s presidential election has drawn opposition from nearly two dozen mayors in the state as well as influential real estate industry groups, all of whom say that the proposed law will only exacerbate the state’s ongoing housing crisis and lead to less development of affordable housing.

Proposition 33 is a measure that would repeal the Costa-Hawkins Rental Housing Act, effectively removing the state’s limits on rent control in local jurisdictions, which also includes a ban on rent control in any housing built after 1995. Prop 33 would let cities control rent prices for new tenants and also prevent the state from enacting rent control bans going forward. Costa-Hawkins was enacted three decades ago and has barred cities from setting limits on rent hikes on single-family homes and apartments built after 1995.

The proposal is the third since 2018 that has gone to voters, asking to open the door to more rent control measures. Similar proposals in 2018 and 2020 failed, but supporters of Prop 33, including The Justice for Renters Initiative, hope that with this new measure, cities, and counties will be able to enact rent control that would help bring down housing costs across a state notorious for its high cost of living. According to the Public Policy Institute of California, around 30 percent of renters spend more than half their income on rent. Supporters of the measure, including the California Democratic Party and other tenant advocacy groups, have raised around $20 million.

So far, 23 mayors of California cities do not support Prop 33, including San Diego Mayor Todd Gloria, who said last week that the legislation would “undermine” the city’s current housing policies, which have begun to yield results, including increasing the supply of housing and modest decreases in rent prices. The National Multifamily Housing Council (NMHC) and pro-development organization California YIMBY have also voiced opposition to the proposed measure. Like others who oppose Prop 33, the groups believe the law would lead to developers building less, something that would further worsen the state’s housing crisis. Opponents of the measure, who have raised close to $70 million, have also argued that by repealing Costa-Hawkins, cities would have more difficulty meeting affordable housing goals.

Industry groups like NMHC and California YIMBY and the mayors of San Jose, San Diego, and numerous other cities aren’t the only ones opposed to the rent control proposal. A recent poll of likely voters in California found that only 40 percent supported Prop 33. It’s clear that California’s housing crisis is one of the most difficult and challenging issues facing state policymakers, and there have been many attempts aimed at easing the crisis through legislation. The Costa-Hawkins law has been in place for nearly 30 years, and with two failed attempts in prior years to repeal it, in addition to a well-financed opposition campaign that has found a lot of support, it’s hard to believe that this time will be any different.

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