“It is an undeniable fact that housing costs in California have grown far out of reach for many residents. Proponents of rent control generally believe that price protections are the most effective ways to help tenants avoid displacement. Nevertheless, the affordability crisis in the state is a direct result of not enough homes being built over the last decade.
Housing production has averaged less than 80,000 new homes annually over the last 10 years and continues to fall short of 180,000 additional homes needed annually. With a current deficit of 2 million housing units, the state needs 1.8 million units by 2025 just to meet its projected population and household growth.
The major purpose of the Costa-Hawkins Act, which Prop. 10 would repeal, is to eliminate “vacancy control” and thereby allow property owners to adjust the rent to market price. It also exempts certain categories of rental units from rent control: New construction, single-family homes and condominiums. The act gives local governments the power to determine most other elements of rent control.
Analysis of San Francisco’s 1994 Proposition I, which extended rent-control to include smaller buildings, found that these properties were 8 percent more likely to convert to owner-occupied housing, leading to loss of rentals, higher rents and $5 billion of welfare losses for all renters.
In fact, even in advance of Prop. 10, new multifamily projects across the state have already been placed on hold.
Some Prop. 10 proponents argue that the issue is about giving local governments control and allowing them to deal with their own local imbalances. In fact, a serious lack of willingness by local governments, and more importantly, local residents, to allow low-to-moderate-income development projects has led to California’s 2017 Housing Package – a package of stricter regulation aimed at holding localities accountable for addressing their housing needs.
In addition, a number of chronic local government problems are driving the current housing crisis, such as strong local community opposition to new housing, outdated zoning laws that limit density and land-use efficiency, caps on housing growth and building height, onerous parking- or transportation-improvement requirements, excessive design review, development fees and the “fiscalization of land use,” which leads jurisdictions to favor commercial growth over housing.
This is where we should be looking for solutions to our housing crisis. There have been numerous suggestions proposed by local and state leaders that are worth discussing:
- A broad “anti-gouging” rent cap making it illegal to raise rents above a specific amount;
- An incentive to include on-site, below-market rate units in exchange for property-tax relief;
- Creating a central registry of rent-controlled housing to ensure equity.
In addition, greater emphasis should be placed on:
- Adoption of inclusionary zoning policies combined with density bonuses;
- Development of housing trust funds and other programs for local funding of affordable housing;
- Exemptions from parking and traffic limitations for low-income housing developments;
- Funding for the rehabilitation of older commercial and publicly used property to affordable units;
- Broadening legalization of accessory dwelling units without additional parking requirements or excessive permitting costs;
- Broadening of zoning to accommodate quality manufactured housing;
- Mixed-use zoning: inclusion of housing in commercial areas.
If California cities want to remain economic and innovative engines, both in the U.S. and globally, and to ensure that children who are born here can remain to live here in the future, preserving Costa-Hawkins and refocusing attention on the above-proposed alternatives will be more productive than Prop. 10.”