Californians Reject Rent Control — Again

by Chris on November 23, 2020

For the second time in two years, California voters defeated a ballot measure that would have paved the way for cities to enact more stringent rent control.

In 2018, voters defeated a similar measure. Both propositions lost by a 60% majority.

The failure to pass rent control measures comes as something of a surprise in California, which has a reputation for more liberal policies. Lawmakers and tenant advocate groups lauded the measures as a way to protect vulnerable renters in hot rental markets.

But several factors worked against the rent control proposition, including recent legislation that already caps rent increases on some traditional rental housing in the state at 5% plus inflation each year. The latest ballot measure would have allowed cities to cap rent at 15% over three years.

The major driving force behind the defeat of these statewide rent control measures appears to be economic. In the run-up to the 2018 election, the state’s Legislative Analyst’s Office warned that rent control policies could:

Reduce landlord income and lower property values;

Lower the state and city government tax bases due to reduced income and property taxes;

Increase administrative costs for local governments;

Drive up rents as landlords pass along increased costs of administration; and,

Discourage investment in rental housing and reduce inventory, driving up both demand and rents.

In those cities that lack affordable housing, studies have shown that providing direct subsidies to vulnerable renters would be a more viable alternative to rent control measures.

The California Apartment Association was instrumental in defeating the measure, arguing that it harkened back to the “radical” rent control measures of the 1970s and ’80s that prompted the state legislature to pass the Costa-Hawkins Rental Housing Act in 1995, which limited rent control measures.

The National Multifamily Housing Council weighed in on the failure of the latest rent control proposition, calling it a “loud and clear” defeat of a “short-sighted” measure and “a victory for hardworking Californians who deserve real housing solutions to increase supply and brings costs down.”

This post is provided by Tenant Verification Service, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada), as well as Criminal Background Checks, and Eviction Reports (U.S. only).

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Disclaimer: The information provided in this post is not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.

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