California Bill Would Cap Rents During U.S.-Involved War

The war in Iran is causing California lawmakers to consider wider price controls.

Happy Tuesday, and welcome to another edition of Rent Free.

This week's stories include a look at a bill that would impose universal rent control over California anytime officials determine that an overseas conflict is raising housing prices.

Additionally, the newsletter covers housing and transportation policy advocate Charles Marohn's First Amendment victory over licensing officials who tried to fine him for referring to himself as an engineer.

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War=Rent Control? 

Until the U.S. adopts Ron Paul's foreign policy, California landlords will have the threat of universal rent control hanging over their heads.

That would be the reality under legislation put forward by California state Sen. Josh Becker (D–Menlo Park) that adds war to the emergencies that can trigger the state's price-gouging law.

The state's current law forbids businesses from raising prices by more than 10 percent whenever the president, governor, or local government declares an emergency in response to fires, floods, riots, pandemics, etc.

Those price controls apply to a wide range of food items, emergency supplies, building materials, and rents and last for at least 30 days, but they can be extended indefinitely.

Becker's bill would allow the governor to declare a state of emergency triggering those price controls whenever Congress declares war, the U.S. is participating in a United Nations peacekeeping operation, or the U.S. is "engaged in active military operations against any foreign state, whether or not war has been formally declared."

"California should not become collateral damage in an international conflict," he said in a recent committee hearing in which he pitched his bill as a response to the gas price increases.

The legislation includes some additional checks on when price controls can be imposed because of war.

Only a presidential or gubernatorial emergency declaration could trigger war-related price controls. The state's attorney general would have to find some nexus between a war and the rising price of a good before the 10 percent price cap is imposed. The price caps could only be extended once for another 30 days, meaning they could only last up to 60 days total.

California's landlords are opposing the bill, arguing that the wide-ranging and vague definition of "war" would create compliance uncertainty and criminal liability for property owners who raise rents while some overseas conflict is ongoing.

Already, the state's attorney general has made a point of prosecuting landlords who've raised rental prices following last year's wildfires.

The state's rent control regime is also already quite complex. Many localities have legacy rent control laws that cap rents on older housing at typically a few percentage points each year. There's also a statewide rent control law that limits rent increases to a maximum of 10 percent on housing that's at least 15 years old.

Becker's bill would add a third layer of rent control that's sporadically triggered by a foreign conflict and, once triggered, would subject a rental housing owner to potential criminal penalties. 

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Housing Advocate and 'Professional Engineer' Wins First Amendment Case 

After a yearslong legal battle with Minnesota licensing officials, Charles Marohn, president of the advocacy group Strong Towns, has won his First Amendment battle with licensing officials over his right to call himself a "professional engineer."

Marohn worked as a licensed civil engineer for many years before becoming a full-time activist and writer. His work at Strong Towns is often critical of modern traffic engineering practices and public works projects.

That's earned him some critics within the profession, one of whom filed a complaint against him in 2020 when he saw that Marohn was referring to himself in speeches and author bios as an engineer despite his license having lapsed.

That initial complaint turned into a formal sanction in 2022, when Minnesota's Board of Architecture, Engineering, Land Surveying, Landscape Architecture, Geoscience, and Interior Design fined and censured Marohn for calling himself an engineer in the context of his advocacy work.

In response to the board's sanction, Marohn sued. He argued that because he had been describing himself as an engineer in the context of his public advocacy, and not to solicit engineering business, he had a First Amendment right to use the title.

Last week, in the U.S. District Court for Minnesota, Judge Nancy E. Brasel granted summary judgment in favor of Marohn's First Amendment claim.

The board had argued that it was allowed to police who call themselves engineers as part of its mission to license the profession and protect public safety. Because Marohn has used the term in a professional context while lacking a license, it could fine him.

Brasel rejected this argument, ruling that Marohn's use of the term engineer was "part and parcel" of his advocacy work, not state-regulated engineering work. That meant any sanction on him for using the term needed to clear the Supreme Court's strict scrutiny standard, which the board failed to meet.

In similar cases out of Oregon and North Carolina, federal courts have generally sided with the free speech rights of the unlicensed engineers doing public advocacy in their fights with licensing boards.

"It is quite a vindication," Marohn says of the ruling in his case. 

"For me personally, having the state say for six years that I lied, had misrepresented myself to the public, was not only hurtful but was really painful to hear," he tells Reason. "The engineering profession needs reform. It needs dialogue. The precedent my discipline had created was just really chilling in the profession."

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Quick Links 

• If you'll forgive the self-promotion, I have an article in the new print issue of Reason making the case that Euclidean zoning is, in fact, named after Euclid. 
• Opponents of California's Proposition 45, which would dramatically reduce the scope of the California Environmental Quality Act, are making the potential for unchecked data center development a key argument against the initiative. The proponents of Prop. 45 say data center projects would not be affected by the proposition.
• The Independent Institute on why many of California's zoning reforms have underperformed. 
• Lawmakers have weakened a pending bill that aims to prevent fire-affected single-family properties in the Los Angeles area from being turned into denser housing. As Politico reports, author state Sen. Sasha Renée Pérez (D–Pasadena) amended the bill to allow duplexes to be built. The bill would still prevent 10-unit subdivisions currently allowed by state law from being built in fire-affected areas.
• San Francisco area developers predict a building boom following rising rents and the city's reduction of affordable housing mandates.