In summary
With the death of California’s proposition to expand rent control, perhaps the bigger question is what incentive the landlords have to compromise at all.
Proposition 10, the statewide ballot initiative that would have allowed California cities to expand rent control, has gone down to defeat. And while the state may not finish counting votes for weeks, it looks like Prop. 10 is going to lose badly.
On one hand, the rent control initiative’s defeat was eminently predictable. The polling started bad, and then got miserable. The “No” campaign—largely funded by landlords and Wall Street firms with large California single-family-home portfolios (the loosened rent control laws could apply to their properties if Prop. 10 passed)— out-raised the “Yes” side 3-to-1. Even in a “blue” wave, the California electorate is still predominantly homeowners. The math was never good.
We’ve written extensively on the reasons Prop. 10 was tanking so bad in the polls, but there’s more to the story that will certainly leak out from the “Yes” side in the days ahead.
The big question among tenants’ rights groups and housing wonks is what happens next? Governor-elect Gavin Newsom has pledged to negotiate a compromise on rent control early in his tenure, but the chief of the “Yes” campaign has publicly stated he doesn’t trust Newsom enough to negotiate. Perhaps the bigger question is what incentive the landlords have to compromise at all. If nearly two-thirds of Californians rejected an initiative to expand rent control, why compromise? The voters have spoken.
Tenants’ groups still hold a few other points of leverage. They’ve talked about putting an initiative on the 2020 ballot, with the hope that presidential turnout and better ballot language could reverse their fortunes. They are also still campaigning at the local level for new rent control ordinances, including in major cities like Sacramento. The landlord association doesn’t want to have to spend money on those fights.
But despite over $20 million spent against them and slogans of “The rent is too damn high!” echoing across the state, the landlords appear to be in a better position than they were before the Prop. 10 campaign began.