“Expanded rent control in California failed with voters Tuesday, but it might be an issue that refuses to go away.
Proposition 10 sought to repeal a 1995 law, the Costa-Hawkins Rental Housing Act, that limits county and city governments’ ability to slow rent hikes. Around 38 percent of voters in California voted for the measure, with 62 percent opposing. A rent control measure in National City also failed.
Activists in San Diego County said Wednesday that they won’t stop the push for rent control and have already begun planning next moves. While voters declined to repeal Costa-Hawkins, it is still possible under the law to enact rent control on units built before 1995.
Rafael Bautista, of the group San Diego Tenants United, said a new super-majority of Democrats on the San Diego City Council meant that organizers will target the city as a place to push for rent control.”
“The California Democratic Party endorsed Prop 10,” he said. “We expect (local Democrats) to do something on rent control. You can’t get endorse Costa-Hawkins and not put rent control up. We are going to press them, press them on those contradictions.”
For those who were opposed to rent control, they were breathing a sigh of relief Wednesday. Borre Winckel, CEO of the local Building Industry Association, said enacting rent control would have encouraged developers to build less housing — exacerbating declines in residential building based on historical averages.
“Why in a production-starved market would you encourage even further reductions in production?” he said.
However, Winckel acknowledged housing advocates were not out of the woods yet. In addition to continued calls for rent control, he said requirements for including subsidized housing in new development would continue to raise costs.
Mayor Kevin Faulconer tweeted Wednesday that Prop 10 was not the answer to the city’s housing woes. He said the solution to shortages was to build more housing.
Yet advocates of Prop 10 say they are undeterred, and will push for another statewide measure to repeal Costa-Hawkins.
Paola Montes-Martinez, a San Diego organizer with Prop 10, said there may be more support in Sacramento for rent control after this election. Governor-elect Gavin Newsom said on the campaign trail he was against Prop 10, but believed that the Costa-Hawkins law should be changed to add more renter protections.
“We built the strongest coalition all across the state than ever before around this issue,” she said. “We are ready to go at it again in 2020, 2022, whatever it takes.”
Why it lost
Rent control advocates said they were outspent by some of the nation’s biggest landlords, which they say ran a campaign that confused voters.
No on Prop 10 raised about $76.2 million and the Yes on Prop 10 campaign had $26.2 million, campaign finance reports show. The No advertisements focused on veterans and older people concerned it would make housing more expensive.
“Even people people that were proponents of Prop 10 were a little bit confused,” Bautista said. “When people are confused, they typically vote no.”
Opponents of Prop 10 said the measure lost because voters knew pitfalls of rent control. Most economists argue that rent control leads to a reduction in the quality and quantity of housing.
“Tonight demonstrates that voters want a real solution to our affordable housing crisis by soundly rejecting Proposition 10’s ill-conceived rent control initiative,” said Sid Lakireddy, chair of the political committee of the California Rental Housing Association, on Tuesday night.
The housing factor
Most real estate agent groups, like the California Association of Realtors, opposed Prop 10 and were pleased it was defeated.
Of concern to real estate agents was Costa-Hawkins prevents any type of rent control on single-family homes or condos. Many critics of Prop 10 said removing those protections would decrease home values.
“Sellers would have been really, really hamstrung,” said Encinitas-based RE/MAX agent Dave Hyman on Wednesday morning. “The values of their homes, in areas where people anticipated rent control coming, would have plummeted.”
He said he didn’t have any buyers concerned about rent control in the past few months, but that he didn’t think it was because it wasn’t on most people’s radar.
It didn’t all go the way the Realtor group wanted last night. Prop 5 was defeated, which would have allowed seniors 55 years old and up to bring their lower tax rate (guaranteed by Prop 13) to any new homes in the state they buy. And do it an unlimited number of times.
Advocates said Prop 5 would have encouraged seniors living alone to downsize and open up homes to young families, but critics noted the state Legislative Analyst’s Officepredicted local governments would lose more than $100 million a year in property tax funding if it passed.”