Proposition 10: Should California expand rent control?

By Peter Dreier

Peter Dreier is E.P. Clapp Distinguished Professor of Politics and founding chair of the Urban & Environmental Policy Department at Occidental College, dreier@oxy.edu. He wrote this commentary for CALmatters.

Almost half of California’s population–17 million people–are renters. Many of them spend more than half of their income on rent, plunging many full-time workers into poverty.

The consequences of California’s skyrocketing rents are dire and unsustainable. People jam the freeways, commuting long distances into cities they can no longer afford.

Many Californians, including children, live in overcrowded and substandard apartments. Each year thousands of individuals, including people who work full-time, move into their vehicles or onto the streets.

Evictions in California are rising, driving up displacement and homelessness. Los Angeles has more than 30,000 homeless residents.  These aren’t people who moved to L.A. for the weather. They are local residents who lost their housing due to landlords’ rent gouging and harassment.

The eviction crisis also grips Sacramento, San Francisco, and other cities as landlords evict families, often to cash in on gentrification. On any given block, the appearance of new luxury housing means that your affordable street is about to become unaffordable.

Unchecked, the situation could bring California to its knees. Quality of life has been compromised and stress levels are skyrocketing as fast as the rent check. Community ties are broken, eroding the social fabric we rely on.

The fact that people earning $15 an hour cannot afford an apartment in any major California city makes clear that a solution is needed now, not years down the road.

That solution is Proposition 10 on the November statewide ballot.

Until 1995, cities could limit rent increases. But the legislature took local decision-making away, and today’s housing mess is one result. Proposition 10 would return power to cities by allowing them to limit local rent increases.

Communities best understand how to urgently address the twin crises of housing affordability and homelessness. Proposition 10 is the only way to provide communities a tool to temper unreasonable rent increases so that nurses, teachers, seniors, and working families can thrive in their communities.

Proposition 10 will repeal the outdated 1995 state law called the Costa-Hawkins Act, signed by Republican Gov. Pete Wilson.  We’re in a radically different era, where rent gouging is common among the new wave of corporate investors.  It’s time to let cities and counties decide what rental laws work for them. Proposition 10 will do that.

The landlord lobby and developers who seek to protect soaring real estate profits perpetuate the myth that local rent control would halt construction. There’s no evidence from cities around the country with rent control that it slows down new housing construction. In fact, much of the Bay Area’s construction boom has unfolded in the few cities that the Legislature in 1995 allowed to preserve local existing rental caps.

Today’s skyrocketing rents hurt the economy by driving workers far from cities, creating urban labor shortages and massive traffic congestion. Cities that adopt rent controls save tenants from paying outrageously high rents. They spend most of the money they save in the local economy, helping local businesses.

Building owners who bought at inflated prices, assuming that rents would keep spiraling up, should not drive housing policy. Parents shouldn’t worry if their adult children can afford rent. Grandparents shouldn’t fear being displaced. People of color, low-wage earners and young children are even more severely harmed.

Our dysfunctional housing marketplaces profits over people’s lives. People deserve a decent place to live without paying half or more of their income to put a roof over their heads.  We can right this ship and get California back on track by passing Proposition 10.By Ilona Clark

Ilona Clark is a small apartment building owner in Oakland, in70@comcast.net. She wrote this commentary for CALmatters.

In 2012 my dad had a stroke that left him unable to care for himself. The income from his property in Oakland’s Adams Point neighborhood helped bring in the income we needed to move him into an assisted living facility, and ensure that he could afford the care he needed.

Before the stroke, my dad was full of life. He worked for Sierra Club for 17 years, Friends of the River and created the Environmental Water Caucus. He spent his free time white water rafting and volunteered in high schools taking kids on science field trips. Now he needs help with the most mundane tasks.

While he is dependent on so much, the income from our family’s 5-unit apartment building allows him to maintain the financial independence to afford his assisted care facility.

The property is an important family resource that each member has come to depend on in a time of turmoil. After falling on some hard times, my brother moved into one of the building’s five units with his two daughters

All of our other tenants are long-term residents. Some have been in their units for more than 15 years. Some of the tenants are paying far below the market rate for rent.

But when someone moves out, we update the unit and bring the rent back up to market rate. That allows us to keep pace with the rising cost of property management, Dad’s healthcare, and other costs that continue to skyrocket for Bay Area residents.

If Proposition 10 passes, it would allow cities to institute permanent price controls on vacant units, capping rents landlords can charge.

Before the passage in 1995 of the Costa-Hawkins Act which restricted rent control, some Bay Area cities passed measures that did just that. So-called “vacancy control” would force small landlords like us to keep rents below market rate – even after tenants move out. Updating our units after one becomes vacant is the only way that we can stay afloat.

I understand that California is in the midst of a historic housing crisis. Many families struggle to keep up with rising housing costs. But radical rent control like the kind permitted under Proposition 10 is not the answer.

Proposition 10 would force small apartment owners to sell off property that is our father’s main source of income. Owners like me who own 10 units or fewer represent the overwhelming majority of landlords in California, managing more than 4 million units.

What’s worse, the initiative would likely harm renters who actually need help.

I know some owners of single-family homes that now are rented who would take them off the market, and others who own apartments would turn them into condos, rather than lose the property altogether under strict rent control.

Instead of trying to regulate our way out of this problem, we need to build enough housing to keep up with rising demand, while making sure that small landlords can continue to operate and keep up with skyrocketing tax and maintenance costs.

Proposition 10 will result in a housing freeze, as fewer affordable apartments will be built and others, like ours, will simply exit the rental business. Proposition 10 would make statewide solutions impossible because it would require a two-thirds vote of the Legislature, or another ballot measure to change future housing policy.

Voters should reject Proposition 10 in November, and state and local leaders should find balanced solutions that actually address our housing crisis.