Rent control

Rent Control Comes Roaring Back to Life in California

A suite of bills just dropped that would impose price controls and limit evictions

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Volodymyr Kyrylyuk/Dreamstime.com

California legislators are trying to revive rent control. This week, state lawmakers introduced a package of new bills that would roll back existing state limits on the policy, and impose new regulations on how much landlords can charge tenants and when they're allowed to kick them out.

The bills are light on policy meat at the moment, but there's enough gristle to give us an idea where the legislature is headed.

"Millions of Californians are just one rent increase away from becoming homeless," said Assemblyman David Chiu (D–San Francisco), one of the legislators who introduced rent control bills Thursday. "This legislation will help bring some peace of mind and predictability to renters, allowing them to plan for their future and stay in their homes."

Chiu's bill, AB 1482, is the most ambitious of the set. It would cap rent increases across the state at a yet-to-be-determined percentage, plus inflation. If this passed, California would become the second state behind only Oregon to have statewide rent control.

Assemblyman Rob Bonta (D–Alameda) introduced his own sweeping proposal with AB 1481, which would ban no-cause evictions and require landlords to show a government-approved reason for kicking out a tenant renting month-to-month. Yet again, the bill contains no specific set of government-approved reasons, though you can bet lobbyists and activists will help figure them out.

Assemblyman Richard Bloom (D–Santa Monica) introduced a bill which would allow local governments to impose price controls on single-family homes and rental units that were built more than 10 years ago. If passed, Bloom's bill would overturn major portions of California's Costa-Hawkins Act, which largely forbids local governments from passing their own rent control policies.

Assemblymember Buffy Wicks (D–Oakland) has also introduced legislation that would create a statewide database of all rental properties.

This legislation comes a few short months after Proposition 10—a ballot initiative that would have repealed Costa-Hawkins and allowed cities to impose whatever rent control policies they wanted—was absolutely crushed at the polls. Nearly two-thirds of voters rejected the measure in November 2018.

That result, lopsided as it was, did not necessarily signal Californians' absolute rejection of rent control as a solution to the state's mounting housing affordability problem. In polls before the election, large pluralities of voters pointed to a lack of rent control as the source of high housing costs.

Post-election analysis pinned the blame for the loss on the confusing nature of the ballot initiative, and divisions within the 'yes' side, many of whom reportedly thought running a ballot initiative in 2018 was premature. A promise from then-gubernatorial candidate Gavin Newsom that he would take up rent control if Prop. 10 failed also lowered the stakes.

As one might expect when faced with an unprecedented degree of government regulation, landlords are not happy.

"The proposals outlined today distract from the solutions," said Tom Bannon, CEO of the California Apartment Association, in a statement. "Applying rent control statewide and allowing rent caps on single-family homes and newer construction would only worsen our housing shortfall. We need to encourage new housing, not create policies that stifle its creation."

Economists also generally take a dim view of rent control, saying that it discourages new construction by capping the return developers can expect from their investment. This is an especially acute risk in California, where ever-increasing land and construction costs make all but the ritziest developments unprofitable.

State politicians would be far better off attacking restrictions on new rental housing, whether that's restrictive zoning, urban growth boundaries, or a cumbersome permitting process that gives development opponents ample opportunities to delay or sabotage projects.

SB 50, a bill that would upzone land near transit stops and in some wealthier neighborhoods, is a better approach. It has its flaws, but would allow more housing construction and improve on the status quo. Rent control, especially of the kind proposed yesterday, would be a huge step back.

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  1. “Millions of Californians are just one rent increase away from becoming homeless,”

    No, they are one rent increase away from having to decide if they want to move, or cut spending somewhere other than rent.

    “This legislation will help bring some peace of mind and predictability to renters, allowing them to plan for their future and stay in their homes.”

    It is not their home; it belongs to the landlord. They buy use of it for a set time at a set rate. Then it is still the landlords, not theirs.

    “Assemblyman Richard Bloom (D?Santa Monica) introduced a bill which would allow local governments to impose price controls on single-family homes and rental units that were built more than 10 years ago.”

    So does this law really set price controls on single family homes, or just the amount a single family home can be rented for?

    Oh, what the hell, it’s only California

    1. The rental market in California is going to be reeeeaaaaallll interesting the next few years. Going to be lots of condo conversions. Going to be lots of wanna-be tenants who bribe other tenants to sub-lease apartments. Gonna be corruption all over the place.

    2. With the exodus of Californians, they’ll eventually have to set a price floor on rentals.

      1. Nah. First they’ll expand the definition of ‘nexus’ to include people who’ve moved away in their tax rolls. Then they’ll implement an exit tax. Then they’ll build customs ports and travel visas to search outbound traffic for those trying to leave without paying ‘their fair share’, and then they’ll build a wall and put guns on it facing inwards.

    3. Those things are related. Rent control lowers the value of a home.

    4. They’re imposing price controls on single family homes and rental property built more than 10 years ago, but (apparently) new housing would be exempt. It’s admission on their part that a total rental control would discourage housing construction.

      The just cause eviction could be a real deal breaker. In reality, tenants are most inconvenienced by undesirable neighbors and would support eviction.

      1. “They’re imposing price controls on single family homes and rental property built more than 10 years ago, but (apparently) new housing would be exempt. It’s admission on their part that a total rental control would discourage housing construction.”

        Yes, but the developers have been suckered once too often. SF’s rent control started out as ‘just this much’, and promptly morphed into ‘well, a little bit more’ several times.
        We now have a raging lefty BOS who, with the stroke of a pen, can make all rentals subject to control; hence, no sane developer works on rental units unless they are required to allow the development of sale units. The market discounts the future, as those who sample jobs *after* the passage of M/W laws either don’t understand, or are being mendacious.
        I’ve mentioned this before: On the block where I live, up and down the street, and over the back fences to the street behind, 16 former rental units are no longer available for rent. Converted to single-families, condo’d, TIC’d, or simply left empty.
        Most of the owners are SF-lefties, who favor rent control. For other owners.

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  2. Californians vote for good government, and they deserve to get it…good and hard.

    1. Isn’t federalism wonderful. I can only concur, they deserve everything they get from their elected officials….good and hard.

    2. The fucked up part is we just voted down Prop 10, local rent control. Now we have these fuckers deciding that what everyone really wanted was state rent control. Un-fucking-believable what these Sac sucking control freaks will do.

  3. Assemblymember Buffy Wicks (D?Oakland) has also introduced legislation that would create a statewide database of all rental properties.

    In order to keep tabs on the vampires, I presume

    1. That’s my own personal assemblyperson. I campaigned hard against her, even though I knew it was futile.

      1. Although she’s more accurately described as “Buffy Wicks (D?Berkeley-Richmond).” She’s only got the part of Oakland that’s known as “Baja Berkeley.”

  4. California is run by communist nut jobs.

    1. Per Marx, the correct term is “Bourgeois Socialists.”

      1. Thanks, I appreciate it.

  5. Economists also generally take a dim view of rent control, saying that it discourages new construction by capping the return developers can expect from their investment. This is an especially acute risk in California, where ever-increasing land and construction costs make all but the ritziest developments unprofitable.

    Imagine the double-whammy in CA – not only do you have to set aside 20% of your units for ‘low-income’ residents leaving you already with a large group of relatively immobile people but now you can’t even raise *those* rents over time.

    So you might lease an apartment at a subsidized market rate in 2019 – and it has to stay at that low rate for 20 years because, if you’re on welfare, not only do you not have an incentive to move to employment, now you’ve got an incentive *to not move to employment*.

    1. Or evict them when they keep catching the place on fire or simply stop paying rent altogether.

  6. And, technically, *everyone in the whole world* is ‘one rent increase away from homelessness’.

    1. Alls I know is, I’m one property tax increase from homelessness.

  7. I live in the Bay Area, and honestly leftists should never be in a position of power. It’s a positive feedback loop of lunacy and economic illiteracy. Make housing prices affordable, then implement policy to make it more affordable, then…

    There is a certain art to always doing the wrong thing. If they were idiots then they would be right half the time, but instead they always choose the exact opposite of what they should be doing. These people have no idea how an economy works.

  8. In polls before the election, large pluralities of voters pointed to a lack of rent control as the source of high housing costs.

    We are fucked with an electorate this stupid.

  9. People need to understand that new housing actually relieves pressure on rental prices. Many people think it increases prices, because new housing is generally more expensive. But what they miss is that when people move into these places, the prices on the places they move out of falls. It’s an issue of education and awareness. Another problem is that we demonize new construction. For example on a TV show an expensive new development goes up in a run-down neighborhood and you think, “Oh no, the rich people are moving in.” And thus that prices will go up. In fact they fall.

    1. “People need to understand that new housing actually relieves pressure on rental prices. Many people think it increases prices, because new housing is generally more expensive. But what they miss is that when people move into these places, the prices on the places they move out of falls.”

      We had (she’s termed-out) a Supe who wanted to outlaw any new construction which priced a single unit (free-standing or condo) above $1m. This was several years back; given SF’s popularity and the imbecilic city gov’t policies, that would pretty much outlaw any new construction.
      She was stupid enough to imagine that those who were ready to pay $1m for a new home would somehow go elsewhere to spend their money and that ‘cheap’ property would be available to someone with less dough.
      Yes, it is a failure of education, and by now, that failure is pretty much ingrained in those who went to gov’t schools. Meaning most of the electorate.

  10. Has the rent control in states where it has been enacted improved the number of housing units available? Or has it just prevented the building of more units?

  11. This is 100% going to happen. Forget it Jake, it’s California.

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