“More than 61% of California voters Tuesday rejected Proposition 10, which would have expanded city authority over rent control measures. The proposition would have repealed the Costa-Hawkins Rental Housing Act, a 1995 law that restricts rent control measures. This latest effort was among the strongest appeals to provide rent control across the state and gained support from the Democratic Party and large activist organizations.
Landlords and developers fought back, spending over $76M campaigning against the proposition, according to the California Secretary of State. Early October polls suggested that Prop. 10 was losing ground among Californians with nearly half of Californians against the expansion of rent control. Tuesday’s election results verified these polls. “The stunning margin of victory shows California voters clearly understood the negative impacts Prop. 10 will have on the availability of affordable and middle-class housing in our state,” California Apartment Association CEO Tom Bannon said in a statement. The CAA led the campaign against Prop. 10. The call for the expansion of rent control is largely being driven by rising rents across California. Rents have increased by nearly 50% in major Bay Area metros since 2010. Many residents have had to move farther away from their jobs to places where they can afford rent and housing prices. Costa-Hawkins prohibits rent control on all types of housing built after 1995. It also allows landlords with rent-controlled apartments to bring a unit’s rent back to market rates when a tenant vacates. Supporters of Prop. 10 argued that rent stabilization would help keep rents affordable for existing renters, especially key members of communities, such as nurses, teachers and firefighters, and keep people from being displaced or homeless when rents increase, according to a fact sheet from the Yes On Prop 10 campaign. It also was part of an effort to address homelessness and affordable housing with three propositions this year. Proposition 1 was meant to build more affordable housing, and Proposition 2 was meant to address homelessness. Both of these propositions passed Tuesday.
Prop. 10 has been hugely contested by landlords and developers who argued rent control would stifle future investment and development. Many have said the housing shortage needs to be solved by allowing the construction of more housing instead of keeping rents capped. “While it is clear rent control is the wrong path, more needs to be done to alleviate housing affordability challenges across the country,” National Multifamily Housing Council CEO Doug Bibby said in a statement. He said addressing the housing crisis will take a three-pronged approach: First, the shortage of homes needs to be addressed and barriers to adding more homes need to be removed. Without adding more units, the country will not be able to address the shortage of 4.6 million apartments expected by 2030, he said. Local governments must also be more involved and find public-private partnership opportunities to bring price points down to create more affordable housing. Additionally, targeted subsidies need to be provided to help the neediest families now. “Proposition 10 was an example of short-term, wrongheaded policy,” Bibby said. “However, it also highlights the very real affordability problems that families are facing. NMHC will continue to work to put forward creative, unique ideas and policies while remaining vigilant against proposals like Proposition 10 that would inhibit growth and deepen the affordability crisis.”