Rent control is apparently having another tough year on the ballot in California. A new poll finds little support for a state initiative that would give local governments more power to limit rent increases.
Only 37 percent of voters surveyed in a recent poll by the University of California, Berkeley's Institute of Government Studies said they'd be voting yes on Proposition 21. This ballot initiative would allow localities to cap allowable rent increases at all properties that are over 15 years old, and limit rent increases on vacant units to 15 percent over three years. Property owners who own no more than two single-family homes would be exempt from the law.
That would mean cities and counties could set rent caps below those found in the state's 2019 rent control policy, which limits annual rent increases statewide to the lesser of 10 percent or 5 percent plus inflation.
Some 49 percent of those surveyed in the U.C. Berkeley poll said they were voting against Prop. 21, while another 13 percent were undecided.
"The poll shows that the more Californians learn about Prop 21, the more opposed they become," said Tom Bannon, the CEO of the California Apartment Association, a landlord trade association that opposes the initiative. "Just as they did two years ago, voters understand that this flawed measure will make California's housing crisis even worse."
In 2018, voters handsomely rejected a similar ballot initiative, Prop. 10, that would have repealed a state law limiting local governments from adopting rent control. That measure captured only 41 percent of the vote.
The U.C. Berkeley poll finds, unsurprisingly, that conservatives and moderate voters are both strongly in the 'No' camp on Prop 21. A majority of those describing themselves as liberal or very liberal support the initiative.
California Assemblyman David Chiu (D–San Francisco), who sponsored the state's 2019 rent control bill, has come out in favor of Prop 21. Gov. Gavin Newsom (D), whose last-minute deal-making was crucial to passing rent control last year, has come out against the measure.
"Proposition 21, like Proposition 10 before it, runs the all-too-real risk of discouraging availability of affordable housing in our state," said Newsom in September, according to The Los Angeles Times.
The measure is supported largely by the AIDS Healthcare Foundation (AHF), which has spent close to $40 million on Prop. 21, nearly double what the group dropped on Prop 10. Opponents of Prop 21, which include business and real estate groups, have spent $73 million fighting the initiative, according to Ballotpedia.
Economists generally oppose rent control for the depressing effects it can have on the supply of new rental units. Developers and landlords, unable to charge market rates for their properties, are less likely to build new housing and more likely to convert existing rental units into for-sale housing, the argument goes. That would, in turn, tend to make long-run affordability problems worse.
Supporters argue that rent control preserves affordable housing, and helps people stay in their homes longer, by limiting unaffordable rent increases.
The current moment is certainly an odd time to enact rent control, given the steep declines in rents in California's most expensive cities. While lots of people in the state are struggling to pay rent, that has more to do with pandemic-related loss of income than sudden rent increases.
Rent Free is a weekly newsletter from Christian Britschgi on urbanism and the fight for less regulation, more housing, more property rights, and more freedom in America's cities.