“Amid a tense battle over rent control in California, real-estate interests are writing big checks to defeat a November ballot measure that would give cities more power to regulate what landlords can charge tenants — and the initiative’s backer responded this week with a $10 million cash infusion.
“We know we will be significantly outspent by the opposition, backed by deep-pocketed developers and investors who continue to wreak havoc in the housing markets,” AIDS Healthcare Foundation President Michael Weinstein wrote in a news release Tuesday. “The greed of these billionaire corporate landlords is causing widescale misery for millions of Californians, and the scourge of homelessness will get much worse because the rent is too damned high. The California dream is dying, and only the voters can save it in November.”
The latest contribution to Proposition 10 — a campaign that until this week had raised only about $2.5 million and spent most of it gathering the necessary signatures to get the measure on the ballot — further ups the ante in a contentious contest that’s growing more costly by the day. In the five-plus weeks since the initiative to lift California’s restrictions on rent control was placed on the ballot, opponents have raised an eye-popping $11.9 million, campaign finance records show.
Much of the debate over rent-control has focused on tenants and the lack of affordable options in the Bay Area and elsewhere. But the flood of early contributions against the measure highlights how much is at stake for real-estate investors and landlords as Californians consider whether to roll back the Costa Hawkins Rental Housing Act, a 1995 law championed by some of the same players.
The threat of the measure’s passage “scares the bejeezus out of everyone in the rental community,” said Steve Maviglio, a consultant for the campaign against Proposition 10. “We’re going to run a full-scale campaign to inform voters about the consequences this will have on worsening California’s housing crisis.”
Nothing would immediately change if voters approved Proposition 10. But if it passes, cities and counties will regain the authority to cap rent increases for single family homes, condominiums and apartments built in recent decades. Costa Hawkins forever defines as “new construction” — and exempt from rent control — apartments built after 1995 or those initially exempted under local rent-control rules as new construction. Those cutoff dates for San Francisco, Oakland and Berkeley are in the late 1970s or early 1980s.
Unfettered by statewide restrictions, cities also would be able to adopt a type of policy known as “vacancy control,” which limits how much a landlord can raise the rent for the next tenant.Committees fighting the measure have raised $21.5 million in cash, while rent-control proponents have collected $12.5 million, records show. That total includes the AIDS Healthcare Foundation’s latest contribution, which did not appear on the state contribution database as of Wednesday afternoon.
Contributions made to defeat Proposition 10 included $3.8 million from the Western National Group, a large Orange County real estate company that develops and manages apartments; $2.4 million from the San Mateo-based Essex Property Trust, which has ownership interests in nearly 60,000 apartment units, many in California; and $1.7 million from Equity Residential, which owns at least a portion of over 78,000 apartment units in 10 states and Washington, D.C., according to its SEC filings.”