Two years ago, four tenants living on New Hampshire Avenue almost lost their apartments when a new landlord tried to evict them. Now a sign in their window encourages, “Vote yes on 10. The rent is too damn high.” In the frontyard, the landlord placed a larger sign: “Vote no on 10. Save affordable housing.”
If passed, Proposition 10 would allow cities to expand rent control — the policy that kept those tenants in their homes. Proposition 10 is a simple repeal of a state law that stands in rent control’s way. Besides tenants’ groups, it’s endorsed by the Democratic Party and ACLU, as well as the teachers, nurses and trade unions.
But the landlord lobby and the Republican Party have spent $44 million — including $7 million from the largest real estate firm in the world — on a confusion campaign. Their concern isn’t for “affordability” as the New Hampshire Avenue sign claims. It’s for their bottom line.
They say that rent control acts as a disincentive to new residential development and that only more market-rate construction will bring rents down.
But rent control doesn’t stop new development. A study of New Jersey construction before and after rent control shows that the policy had no discernible impact. Researchers at UC Berkeley found that from 2007 to 2013 “the six cities that had rent control in the Bay Area actually produced more housing units per capita than cities without rent control.” When Boston threw out its rent-control laws in 1995, development never reached the same heights as when the laws were in place — but rents nearly doubled in eight years.
Indeed, we need more than new market-rate housing to get affordability for all. The Federal Reserve recently determined that increases in supply won’t automatically reduce rents. New York City’s former planning director said the “more housing” theory didn’t work in practice there. Zillow data show that adding market-rate units only benefits the rich: Though rents have declined slightly for luxury rentals, rents for working people continue to rise.
Besides “build, baby, build,” the real estate industry’s other refrain seems to be, “Pity the poor landlord.” How will landlords stay in business? The Supreme Court grants them a right to “reasonable returns”; Proposition 13 limits their tax increases to 2% a year — a stricter cap than any rent-control law on the books. How will landlords maintain their buildings? Every ordinance allows renovation costs to be passed on to renters. Their most compelling argument is a threat: Owners and developers will turn units into condos to avoid regulation. But no voter should take pity on price-gouging, or blame a policy for loopholes we can close.
When rent is taken into account, one in five Californians lives in poverty. The scale and urgency of this crisis make rent control a necessary policy tool. It’s fast, while affordable housing takes time to build. It’s free to governments, while building and subsidies are expensive. It’s proved to keep homes affordable and keep tenants in their homes. This is the argument of three new studies, from UC Berkeley, UCLA and USC. (Even the landlords’ favored analysis of rent control — by former Goldman Sachs and UBS bankers now at Stanford — admits the policy benefits people who have it.)
Rent control isn’t just ethical, it’s popular. Polls show it is supported by more than 60% of Californians. The ballot initiative system is supposed to ensure the democracy of our laws. Proposition 10 will stop an old state law from dictating how cities decide to protect their residents now.