A statewide vote to allow more widespread rent control could have big implications for San Diego County if it passes.
The effort, led by tenants rights groups and bankrolled by Los Angeles HIV/AIDS activist Michael Weinstein, qualified for the Nov. 6 ballot in June.
If approved by voters, the initiative would repeal a 1995 law that limited county and city governments’ ability to slow rent hikes. Even if it passes, it would still be up to local lawmakers to approve rent control or approve citizens’ initiatives.
San Diego is one of the few big cities in California with no form of rent control, unlike San Francisco, Berkeley and Los Angeles.
Alan Gin, an economist at the University of San Diego, said rent limitations may help some people but it could result in less housing being built, something desperately needed in the state.
“Housing prices have gotten way out of hand in California,” he said. “Even though I don’t think (rent control) will work, I can understand people’s frustration.”
Economists typically argue that rent control will lead to a reduction in the quality and quantity of housing available. But, that hasn’t stopped frustrated renters in San Diego and the rest of California from taking action.
The average San Diego County rent in March was $1,887, pushed up by an influx of new, high-end apartments downtown, said MarketPointe Realty Advisors. It has increased 8 percent in a year.
A local organizer for Prop 10, Paola Martinez, said low-income Californians are struggling to survive. She said arguments that rent control would slow housing production are hard to stomach for low-income renters.
“Housing is being created, it’s just not the type of housing we need,” she said of new residential projects. “We are not building affordable housing.”
One of the most common arguments against rent control is that if a landlord knows they can’t charge more, they won’t fix up the apartment. Try telling that to a San Diego renter, Martinez said.
“Even without rent control, those issues are still there,” she said. “We’re seeing increases of rent at a super high rate in pretty deplorable conditions, uninhabitable conditions. Their landlords aren’t making any repairs, even when they are increasing the rent.”
Prop. 10 would repeal the Costa-Hawkins Rental Housing Act, which bans cities and counties from capping rent increases on apartments built after 1995. If passed, it means new apartment buildings that are being constructed downtown could be subject to the law. The act also prevents rent control on single-family homes.
Martinez is director of the San Diego chapter of the Alliance of Californians for Community Empowerment, which is also part of a coalition of community groups in National City that began gathering signatures in March for its own rent control measure.
The National City effort would cap annual rent increases at 5 percent. The city has filed a lawsuit against the organizer, alleging its plan to create a rent control board would violate state law. A court hearing is scheduled for July 20.
Borre Winckel, CEO of the local Building Industry Association, said its members are concerned about lenders not funding big multifamily projects out of fear that that Prop.10 could pass.
He said a potential slowing down of new home construction would end up making things harder for renters because fewer units would be available.
“It will displace and de-house people who need new units, so it’s not a recipe for more production,” he said. “If there’s one thing the state needs more of is more production. New production and rent control can’t exist in the same statement. It’s illogical.”
A few secondary effects of Prop. 10 passage could be a slowdown in home price increases and maybe a few more opportunities (at least in the short-term) for homeownership. The repeal of Costa-Hawkins would mean that rent control would be allowed for single-family homes, potentionally limiting the value for an investor.
“It’s sort of the same thing as the construction argument,” Gin said. “If the home is less valuable, in terms of how much you can rent for, it could affect the price.”
Winckel said apartment complex owners may respond to passage by converting units to condos. While that would create more homeownership opportunities for San Diegans, he said the measure would eventually make things more difficult for renters because they would be forced to move.
“It’s not a good news story because converting from rentals to condos means you’re not net adding new units to the market,” he said.
There will likely be a strong campaign to defeat Prop. 10. Last week, the Building and Construction Trades Council of California joined with the California Apartment Association and other groups to launch a “No on Prop. 10” campaign.
However, at the ground level battle for rent control, organizers say there is excitement that the proposition will soundly win.
Rafael Bautista has been organizing with a group called San Diego Tenants United since 2015 to bring rent control to the region, holding a march downtown in 2016. He said renters are so frustrated that a spark has been lighted in the state that will be hard to put out.
He said if National City’s measure passes, it is only a matter of time before it spreads around San Diego County.
“National City is like a release valve,” Bautista said. “Then, that’s even more burden on San Diego (city) and surrounding cities.”