“Imagine San Francisco were considering a $400 million per year tax on rents, with proceeds distributed as a rental subsidy. The city would structure the tax to be highest for renters who most recently moved into their homes, and structure the subsidy to be highest for people who have been in their homes longest, and for those with the most expensive homes.
Such a law would be roundly criticized as anti-immigrant and anti-young, and we would question why it attempts to neither explicitly tax the rich nor give to the poor. For such an enormous tax, why forgo a progressive policy design?
Yet this is exactly the law San Francisco has had in place since 1994: you might know it as rent control, which limits annual rent increases. That $400 million comes from a 2017 Stanford study, which found that rent control reduced rents by about that much for incumbents while raising market rents by a similar amount.
In November, Californians will vote on Prop 10, which would allow cities to double down on this policy. Doing so would disadvantage immigrants, young people, and the economy. Prop 10 would give cities virtually limitless power over rent control, enabling them to block development amid the state’s worst housing shortage. The state should instead make housing affordable for everyone by ensuring more of it gets built and providing financial assistance to the most housing-insecure.”