CALIFORNIA – A recent report published by Berkeley IGS Poll found that 26% of renters did not support Proposition 33 – rent control, which will be up for vote in this coming November 5 election.
This split suggests that not all renters believe rent control is the best solution for affordable housing. Another 26% of renters said they were undecided.
The 3,000 person poll found that overall 37% of respondents were in favor of rent control.
One-quarter of Californians live in rent control communities
Proposition 33 – the Costa-Hawkins Rental Housing Act (1995), will allow cities and counties to limit rent on any housing including single family homes and housing built on or after February 1, 1995.
According to the Legislative Analyst’s Office (LAO) about one-quarter of Californians live in communities with local rent control. Examples of places with rent control are Los Angeles, San Francisco, and San Jose.
In addition to local rent control laws, a state law prevents most landlords from increasing a tenant’s rent by more than 5% plus inflation – up to a total of 10% in a year. This law lasts until 2030.
If Proposition 33 passes, some renters would spend less on rent
The analysts said that if Proposition 33 passes, local rent control laws probably would expand in some communities.
“Some renters who live in properties covered by rent control would spend less on rent, while those in properties not covered would likely face higher rents,” said the LAO.
This is because rent control laws typically don’t apply to new tenants. Instead, they limit how much landlords can increase rent for existing renters, leaving landlords free to charge market rates when a new tenant moves in.
The analysts also said some renters would move less often.
Fewer homes available to rent
Analysts looked at how the proposition may negatively affect renters and communities.
They said that fewer homes would be available to rent. One reason for this is that some landlords would sell their properties to new owners who would live there instead of renting it out.
In addition, the value of rental housing would decline because potential landlords would not want to pay as much for these properties.
“A decline in the value of rental properties would reduce the amount of property taxes paid by landlords. This would reduce property tax revenues for cities, counties, special districts, and schools,” said the analysts.
The report says with time, these property tax reductions likely would be at least tens of millions of dollars each year annually.
Limitations of rent control
A 2018 Berkeley report acknowledged that rent control is just one part of the solution, and also has limitations that require thoughtful policy design to mitigate any downsides.
“Other strategies to resolve the housing crisis — producing more housing, preserving existing affordable housing, removing barriers to racial integration — are essential, but they are long-term solutions,” said the researchers.
In the meantime, they argue that rent control policies offer an immediate and cost-effective way to stabilize rents, while more permanent solutions are being developed.
