A November ballot initiative, Proposition 21, which would allow local governments to expand rent control measures, has raised concerns it would lead to less supply amid California’s historic housing shortage.
A similar measure on the ballot in 2018 was rejected by nearly 60% of California voters due to the state’s deficit of affordable housing.
Housing providers, labor unions, and business organizations have formed a coalition, Californians for Responsible Housing, to push for a ‘No’ vote.
“The world has changed because of COVID, but this is the same tired, defeated idea. Independent analysis by economists and affordable housing experts say Prop 21 will worsen our housing crisis,” Californians for Responsible Housing spokesperson Steven Maviglio told the Northern California Record by email.
“In addition, we are seeing double digit drops in rents in SF, LA and other markets, while mom and pop landlords are struggling,” Maviglio said. “Prop 21 is like pouring gasoline on a fire. It will lower property values, reduce revenues to communities, and hurt the already struggling development of affordable housing.”
The group wants the governor to convey to voters the impact of Proposition 21.
“Governor Newsom opposed Proposition 10,” Maviglio said. “Prop 21 is a virtual copy of that initiative, which lost by nearly 20 percentage points. Since then, he signed Assembly Bill 1482, which is the nation's strongest tenant protection law.”
AB 1482 needs to be given a chance to work, Maviglio said, noting that it just went into effect in January.
In accordance with California’s 1995 Costa-Hawkins Rental Housing Act, local jurisdictions can use rent control for multi-unit dwellings, but just those built before Feb. 1, 1995, and the landlords can adjust new tenants’ rent to the market rate. If passed, Proposition 21 would allow cities and counties to enact stricter rent controls, which proponents argue is necessary to address demand for less costly housing.
Yet opponents maintain it would end up decreasing supply.
“It will stifle the development of new affordable housing and result in less housing on the market, as owners pull their units off the market rather than being subject to the restrictions of Prop 21,” Maviglio said. “It does nothing for evictions, nothing to reduce homelessness, nothing to add affordable housing.”
The state’s nonpartisan Legislative Analyst’s Office notes Proposition 21 will reduce property values.
“Overall, a potential reduction in state and local revenues in the high tens of millions of dollars per year over time,” the analysis states. “Depending on actions by local communities, revenue losses could be less or more.”
The net effect would be cuts in funding for schools and services, Maviglio said.
“We are hopeful the Governor will agree with the editorial boards of [almost] every major newspaper so far, and urge voters to vote no on Prop 21,” Maviglio said.