This article was posted on Friday, Feb 01, 2019

With the resounding defeat – 62% to 38% – of Prop. 10, one might conclude that the debate over rent control has been settled. After all, of the 58 counties in California, only San Francisco voted for repeal of Costa-Hawkins. Not only that, but even in the rent control stronghold of San Francisco, the vote was far from decisive: 52.7% for repeal and 47.3%against – not exactly a strong political statement.

Outside of San Francisco, the California electorate as a whole is still predominantly homeowners. With the defeat of Prop. 10, the electorate seemed to be sending a clear message: “We do not want rent control regulation to govern the relationship between us and our renters.” Despite this fact, however, tenant advocates continue to call for “reform” of Costa-Hawkins, believing that their movement still has momentum and that the fight for expanded rent control and tenant protections are actually gaining momentum. Prop. 10 has put a new focus on an old question: does rent control tend to ease or compound a shortage of affordable housing? Although economists have long agreed that it tends to do the latter, for most California voters who rent, rent control appears to be an easy sell.

 The California Legislature

Democrats have a “super-super majority” of 60 Assembly members out of the 80 total. Although far from united, they can pass whatever they want and over the veto of the Governor. Assemblyman David Chiu, former SF supervisor, current chair of the Assembly’s powerful Housing and Development Committee, and staunch supporter of Prop. 10, has vowed to continue the fight for renter protections by introducing new legislation. He and other lawmakers are discussing bills to help tenants for the legislative session beginning January 7, including proposals to prevent steep rent increases during housing crises and to strengthen just-cause eviction laws. “We’re looking at a wide range of ideas,” Chiu said.

Tenant groups have talked about putting an initiative on the 2020 ballot, hoping that presidential election year turnout and better ballot language might reverse their fortunes. But with extended time and the vast sums of money required to develop a new ballot initiative, challenges in 2019 and 2020 are more likely to come from the Legislature. The Prop. 13 split-roll initiative has already qualified for 2020, so another major housing initiative is unlikely.

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 Local Initiatives

That’s not true, however, at the local level, where quite a few measures will be in play. For example, Sacramento residents have qualified a 2020 ballot initiative that would implement rent controls on the city’s older rental buildings. Despite their loss at the state level, tenant groups are confident in the enduring appeal of rent control, especially as the renter population in California grows. They are expanding their efforts to pass or strengthen local ordinances in Santa Rosa, Santa Cruz, Santa Ana, Pasadena, Glendale, Inglewood, Long Beach, and National City(San DiegoCounty). In the last election, Oakland voters passed Measure Y with over 58% voting to strengthen tenant eviction protections. And inSan Francisco, with the current makeup of the Board of Supervisors, we can expect new, even more burdensome, legislation to be proposed here as well.

 The Governor: A Grand Bargain on Rent Control?

Governor-elect Newsom came out against Prop. 10, despite being an advocate of rent control as mayor ofSan Francisco(rent control being the Holy Grail of SF politics). But he pledged, if elected and Prop. 10 lost, to work “immediately” to address the issue by hammering out a deal between landlords and tenant groups. Proponents of Prop. 10 are deeply skeptical. Newsom has stated that housing will be his top priority as governor – “building more units for low and middle-income residents, preserving affordable neighborhoods, and preventing displacement.” In fact, he has set a goal of building 3.5 million new units of housing by 2025 – just six years from now—a pace six times greater than housing construction in the state during the last decade, a number many consider wildly optimistic.

Peter Reitz is the SPOSF/SPOSFI Executive Director.  Reprinted with permission of the Small Property Owners of San Francisco Institute (SPOSFI) News.  For more information on becoming a member of SPOSFI or to send a tax-deductible donation, please visit their website at or call (415) 647-2419.