California voters overwhelmingly rejected a rent control initiative that opponents argued would have exacerbated the state’s housing shortage, delivering it a roughly 20 percentage point defeat as they had when a similar measure was on the ballot two years ago.
The most current vote count available from the California Secretary of State showed Proposition 21, which sought to let local governments expand rent control, was defeated 40.1% to 59.9%.
Additional rent control measures would have hindered – not encouraged – housing development, Californians for Responsible Housing spokesperson Steven Maviglio told the Northern California Record.
“We are pleased that voters recognized that Prop 21 would have worsened California’s housing crisis, and that it was nearly a 20-point defeat,” Maviglio said. “Voters have now spoken twice loud and clear, that more regulation that will lead to less affordable housing is not the way to solve this crisis.”
Maviglio pointed out that Gov. Gavin Newsom had formally opposed the measure.
“In the past year, California has passed a historic version of statewide rent control – the nation’s strongest rent caps and renter protections in the nation – as well as short-term eviction relief,” Newsom said in a Sept. 11 statement posted on businesswire.com. “But Proposition 21, like Proposition 10 before it, runs the all-too-real risk of discouraging availability of affordable housing in our state.”
The governor approved the Tenant Protection Act of 2019 last October.
“He had just signed AB 1482 and wanted to ensure that worked,” Maviglio said, adding that rent control is viewed as a deterrent by both builders and landlords.
“When they enact rent control, housing comes off the market,” Maviglio said. “So for renters there is less affordable housing in a state where people already are leaving because the cost of housing is ridiculous.”
Opposition to the measure came from a broad coalition of business, labor, and civil rights advocacy groups.
“There was nothing in Prop 21 that addressed evictions and homelessness, and it didn’t build a single unit of housing,” Maviglio said.
Under 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. Proposition 21 supporters argued that by allowing cities and counties to enact stricter rent controls, it would keep housing costs down.
The state’s nonpartisan LAO (Legislative Analyst’s Office) noted that in terms of fiscal impact, Prop 21 could mean a potential reduction in state and local revenues that approached the high tens of millions of dollars over time.
“The key takeaway is to leave the Costa-Hawkins law intact and to find and fix the real obstacles to building more affordable housing in California,” Maviglio said.