California on verge of adopting rent control measure

Ten months after California voters rejected a rent control ballot initiative by more than 2.3 million votes – 59 percent to 41 percent – the state is on the brink of enacting a rent control measure approved by the Legislature and backed by Gov. Gavin Newsom.

Proposition 10 failed last year after two political action committees backed by apartment owners, real estate agents and others in the rental business paid for tens of millions of dollars in TV ads that depicted the measure as being a threat to seniors – a tactic that was effective but criticized as manipulative. This view that they didn’t lose a fair fight is one reason that Prop. 10’s main backer – the AIDS Healthcare Foundation – and other advocates plan a 2020 ballot measure on rent control.

This belief that rent control was a political winner despite Prop. 10’s result was also on display in Sacramento with Assembly Bill 1482. Assemblyman David Chiu, D-San Francisco, and other Democrats barely acknowledged Republican complaints that the bill amounted to an end run around the will of voters. Instead, they said Californians demanded relief from soaring rent.

Newsom opposed concessions made by bill author

But Chiu was worried enough about winning support for AB1482 that he weakened some of its provisions to get business groups to remain neutral on the bill. This led to an unusual scenario over the last month in which a high-profile, controversial measure actually was strengthened – not weakened – as final votes neared. That came after Newsom and his staff told Chiu he shouldn’t have compromised.

The Assembly passed AB1482 on the strength of 48 Democratic vote. It was opposed by a bipartisan group of 26 members. It passed the Senate 25-10 on a close to party-line vote.

The version that reached Newsom’s desk this week limits most annual rent increases to 5 percent plus inflation, with the law sunsetting in 2029. It doesn’t supersede local rent control laws in place in Los Angeles and about 20 other cities in the Golden State, with many in the Bay Area. Apartments built within the last 15 years are not covered. Nor are rented-out single-family homes – with the exception of those owned by investment groups or corporations. 

The passage of the rent control measure comes amid evidence that despite three years of new laws meant to ease the housing crisis, homebuilding in the state is actually declining in 2019. Capitol watchers said now at least lawmakers who backed it can tell their constituents they got something big done on housing.

Will California again be a national trendsetter?

But the steady advance of AB1482 was also treated as a national story by the New York Times and many other major news outlets because of California’s long history as a national trendsetter.

Cea Weaver, campaign coordinator of Housing Justice for All, told the Times that the bill’s likely enactment could be a game-changer. “Any victory helps to build a groundswell,” Weaver said. “There is a younger generation of people who see themselves as permanent renters, and they’re demanding that our public policy catches up to that economic reality.”

California became the second state after Oregon to adopt statewide rent control. Chiu’s bill was modeled on one that Oregon lawmakers enacted in February.

Many economists believe rent control ends up being counterproductive because it discourages construction and adequate maintenance, among other problems.

In 1992, when the American Economic Association surveyed its members on the topic, 93 percent agreed that “a ceiling on rents reduces the quality and quantity of housing.”

7 comments

Write a comment
  1. Ulysses Uhaul
    Ulysses Uhaul 13 September, 2019, 16:24

    Awesome….more complicated law, aggressive publicans, lawsuits, evictions, condo conversions, general unforeseen complications including more pro slum lords.

    Reply this comment
  2. Sean
    Sean 13 September, 2019, 18:37

    “There is a younger generation of people who see themselves as permanent renters, and they’re demanding that our public policy catches up to that economic reality.”
    And why is it that way? They are paying dearly for higher education because state funding has been reduced due to ballooning MediCal expenses. The Fed student loan program has allowed schools to constantly ratchet up tuition and make students indentured servants to the government for the first 10-15 years of their careers. The Medicaid expansion has driven up their insurance costs by having to cover for the 20% discount the govenment gives itself with healthcare providers along with the capped ratios of insurance payments between older and younger people with private insurance. So they are tapped out even before the anti-development culture in the California has led to sky high rents. The only way out of the younger generation’s California economic reality is to find a new one in a different state.

    Reply this comment
  3. deweaver
    deweaver 13 September, 2019, 19:05

    Rent control has been tried around the world many, many times always with the same result of less housing and higher costs unless the government steals all the wealth builds the equivalent of public housing blocks which rapidly evolve into instant ghettos.

    Doing the same thing again and again and expecting a different outcome is the definition of insanity and that fits our political elite ruler’s behaviors. Our elite political rulers seem to believe that they are wise enough to manage the details of our society, even as institutions they have created can’t even add motor voter registration without creating a disaster requiring “more resources” and “labor”.

    Reply this comment
  4. Jay
    Jay 13 September, 2019, 23:59

    If the bill was turned down by the voters, how could it be over turned and be legal? What good is our voting if it’s changed to what the politicians want? I’m seeing more and more of this.

    Reply this comment
  5. Queeg
    Queeg 14 September, 2019, 12:52

    Comrades

    Unintended consequences bear watching in your relocation plans.

    Changing landlord/tenant, enviro related and real estate laws in such a dramatic manner….in a short period.

    reduced military security deposits, tenant relocation fees, just cause rental terminations litigation, vacant property and bare land taxes, residential rent caps, CEQA politically biased dense housing and homeless exclusions, homeless shelters on nonprofit and church property, split role real estate taxation, plus a myriad of energy/save planet proposals: building and parking lots rain water runoff taxes, no residential natural gas usage/no fireplaces/no outdoor bq’s, mandated solar on residential buildings, painting streets and roofs white,…..,…

    Just a warmup……due to mass resident poverty/helplessness/despair….California moves rapidly to collectivism/ command economy for all.

    Reply this comment
  6. Jay Bird
    Jay Bird 19 September, 2019, 14:15

    I am not surprised that our pompous and self righteous band of socialists decided to once again do an end run around the people. As the Democrat run legislature reaps their nice six figure salaries with nice traveling perks and live in comfortable little enclaves in their well to do districts, the rest of us must live within our means, pay the regressive taxes, and deal with the aftermath of these policies.

    As they invite the rest of the world to come to the golden state and reap all of the benefits that should rightfully be awarded to the tax paying citizen, us working class families trying to get by and playing by the rules are becoming poorer and poorer as the ruling elite continue to raise taxes on the working class.

    So come election time, i am going to let everyone know that “I am too poor to vote democratic anymore”. Both my wife and I.

    Good luck with rent control!

    Reply this comment
  7. Jay Bird
    Jay Bird 19 September, 2019, 16:39

    By the way, apparently a federal judge today blocked SB27, the partisan and unconstitutional law passed by our cheerful legislature and our lovely governor Gavin that would have kept president Trump off the ballot in California.

    Reply this comment

Write a Comment

Leave a Reply



Chris Reed

Chris Reed

Chris Reed is a regular contributor to Cal Watchdog. Reed is an editorial writer for U-T San Diego. Before joining the U-T in July 2005, he was the opinion-page columns editor and wrote the featured weekly Unspin column for The Orange County Register. Reed was on the national board of the Association of Opinion Page Editors from 2003-2005. From 2000 to 2005, Reed made more than 100 appearances as a featured news analyst on Los Angeles-area National Public Radio affiliate KPCC-FM. From 1990 to 1998, Reed was an editor, metro columnist and film critic at the Inland Valley Daily Bulletin in Ontario. Reed has a political science degree from the University of Hawaii (Hilo campus), where he edited the student newspaper, the Vulcan News, his senior year. He is on Twitter: @chrisreed99.

Related Articles

Northern California fires may hammer tourism, add to housing crisis

The deadly and massively destructive wildfires now in their second week of ravaging Northern California’s wine country are likely to

Analysis: Which proposed bills help, hinder, small businesses

Among the approximately 2,000 bills considered in the California Legislature this year, many affect small businesses. Here’s the analysis of

Moody's Views of Brown's SOS Speech

FEB. 1, 2011 By WAYNE LUSVARDI In a press release dated Jan. 27, Moody’s credit-rating agency began adding unfunded public