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.”

For the third straight year, the state Legislature has approved major legislation meant to accelerate housing construction in California to help stabilize or reduce the cost of shelter. But will the latest – Senate Bill 330, the Housing Crisis Act of 2019 – fare any better than past legislation in improving the housing picture in the Golden State?

The bill’s sponsor, Sen. Nancy Skinner, D-Berkeley, is optimistic, saying in a news release that its enactment would help create the housing California “desperately needs.” Her bill is meant to force local governments to speed up the processing of building permits and limit fees on housing. It also forbids cities and counties from reducing how many homes can be built. SB330 easily won final legislative approval last week.

But there was similar optimism about past measures. Most notably, Gov. Gavin Newsom has used new powers to aggressively target local governments which don’t build enough housing, especially units with rents or mortgages within reach of families with average incomes or less.

Multifamily permits off 42% from 2018

Yet while this has produced headlines with the Newsom administration’s January lawsuit against Huntington Beach over its refusal to add more affordable units and with threats against other cities, it doesn’t appear to be boosting housing construction in any notable way.

State data shows residential building permits dropped by 12 percent in the first five months of 2019 compared with the same span in 2018. And the statistics were far grimmer for less expensive multifamily housing units, which plunged 42 percent.

Builders and housing experts who contributed to a recent Sacramento Bee print symposium on the news of declining residential construction were not optimistic. Two fundamental problems – one much noted, one less appreciated – are not going away, they said.

Tia Boatman Patterson, Newsom’s top housing adviser, said there continue to be bottlenecks at the local level in getting housing through bureaucratic hoops.

Sometimes there’s what appears to be defiance. The New York Times recently reported that California cities “with some of the state’s highest rents, including Atherton, La Canada Flintridge, Los Altos Hills and Rancho Palos Verdes, issued no multifamily construction permits from 2013 to 2017.”

Cash-strapped cities increasing fees

But some participants in the Bee project said the problem isn’t just getting local governments to live up to their obligations and to stop dragging their feet in granting permits and approvals. Many cities and counties are so fiscally stretched because of the rising costs of pensions and other expenses that they’re increasingly adopting new or higher fees on housing projects – even as developers beg for relief.

Rob Lapsley, president of the California Business Roundtable, even said these fees were on their way to being a bigger obstacle that the California Environmental Quality Act.

But there was also some pushback at the notion that NIMBYs were the biggest problem. Instead, some argued that it’s the fact that between the high cost of land and regulations that can add $200,000 to the cost of a single-family home, building housing in California is riskier and less appealing for developers than most other states. This decades-old problem may have been overshadowed by other housing issues of late, but it’s a consensus view of builders that has never gone away.

The executive director of the League of California Cities, Carolyn Coleman, noted in her contribution to the Bee that more than 450,000 homes had received final approval from local authorities but the vast majority weren’t being built.

The takeaway: Even when local bureaucratic obstacles are overcome, adding housing in California is a difficult proposition.

Newsom has not taken a position on SB330, but his signature is considered likely. It passed the Assembly 67-8 and the Senate 30-4.

Opponents of rent control and new restrictions on how landlords treat tenants succeeded in either weakening or blocking bills that needed to advance last week to have a chance of being enacted this legislative session.

Coming seven months after voters decisively rejected Proposition 10, a statewide rent control measure, the setbacks were a fresh reminder of the limited political clout of renters – even in a state where millions of residents’ complaints about the cost of housing are a constant of life.

Assembly Bill 1482, by Assemblyman David Chiu, D-San Francisco, was the focus of the most wrangling. Inspired by a similar law newly adopted in Oregon, the original bill would have limited annual rent increases to 5 percent plus the federally reported increase in California’s consumer price index. It had a 2030 sunset clause.

But after intense opposition by the California Association of Realtors and other business groups who said it would discourage housing construction in a state with a huge housing shortage, Chiu agreed to concessions that were so significant that most critics took a neutral stand on his bill, starting with Realtors.

It now limits rent increases to 7 percent plus consumer price index inflation and sunsets in 2023. It also doesn’t apply to housing projects built in the last 10 years or to landlords renting 10 or fewer units.

The bill doesn’t apply to housing units in areas where local rent-control laws are in place and puts no limit on how much rent can be increased after a tenant moves out.

But even with Chiu’s concessions, AB 1482 still only got the votes of 43 of 80 Assembly members. Chiu’s fellow Democrats made up the big majority of the 31 no votes. Even with reduced business opposition, the bill may not make it through the state Senate.

Tenant protection bill fails without getting committee vote

Yet it still fared much better than Assembly Bill 1481, by Assembly members Tim Grayson, D-Concord, and Rob Bonta, D-Alameda, which would have set up a “just cause” bureaucratic process that most landlords would have to follow to evict tenants for reasons other than failure to pay rent, property damage or repeated violations of rules. The process would have required landlords to provide a written reason for the eviction, then give renters an opportunity to correct problems that were cited.

“If landlords wanted to move into the property, intend to remodel it or were seeking eviction for other circumstances that were not tenants’ fault, property owners would in most cases have had to provide relocation assistance,” a Los Angeles Times analysis noted.

AB 1481 never even come up for a committee vote, reflecting a lack of enthusiasm for the bill by the Assembly’s Democratic leaders.

In a statement issued by Grayson, he praised the Assembly for passing the rent-control measure, but said “rent-gouging protections are not enough when tenants can still be evicted without cause or due process.”

AB 1482 did include one notable tenant protection. It says landlords of properties covered by the bill cannot seek evictions solely because they want to raise rent by more than the measure allows.

Meanwhile, an aide to Gov. Gavin Newsom said he was pleased by the measure’s passage. Newsom called for lawmakers to enact some form of rent control in a February speech and again in April.

2018 rental data suggest bill will have limited effect

But rental statistics for 2018 compiled by the RENTCafé website suggest AB 1482 won’t necessarily have a substantial effect on landlords. According to the state Department of Finance, California had a 3.7 percent increase in its consumer price index in 2018. (Federal figures for the Golden State were not available.) That means under Chiu’s bill, landlords probably could have raised rates by about 10.7 percent in homes covered by AB 1482.

But according to RENTCafé data, that’s much less than the average rent increase seen in the California cities with the highest percentage hikes in 2018 – Los Angeles (6.6 percent), Fresno (5.7 percent), Riverside (5.6 percent) and Long Beach (5.5 percent).

The need for less expensive housing in the Bay Area and Silicon Valley has been so plain for so long that many of those on the outside of California looking in wonder why local governments, developers and voters can’t get on the same page and get things done. A January story in the New York Times about the unexpected backlash to San Jose Unified’s attempts to prevent an exodus of teachers by offering subsidized housing reflected this sense of puzzlement.

But a story unfolding at the University of California’s Berkeley campus shows the complexity and difficulty of adding housing in urban areas of the Golden State. Housing development is seen by some communities and interest groups as a zero-sum game – if one side wins, then the other side or sides must have lost.

To address a lack of affordable housing that UC Berkeley says has made it difficult to attract and retain professors, Chancellor Carol Christ last year launched an aggressive push to replace a four-story campus parking building with 350 vehicle spaces with a $126 million complex that included 150 faculty apartments, 170 parking spots and a relatively small academic building.

But the plan to tear down the Upper Hearst parking building has faced steadily increasing criticism from faculty members. Their concern is that building the project would add to the heavy debt load borne by the university because of the $474 million cost of recent stadium renovations and the construction of a new student athletic center.

Yet coverage by the San Francisco Chronicle earlier this month of the Berkeley faculty Senate’s 174-69 vote asking Christ to suspend the project noted that the most pitched criticisms of the proposal came from engineering faculty members who stood to lose their access to convenient parking. Their criticism of the project continued even after Christ presented documents that she said showed the developer and property manager bore the financial risks if the project had cost overruns or other problems – not the university.

City says campus minimized enrollment growth

Meanwhile, a new front in this fight emerged in late April when the Berkeley City Council voted to sue UC Berkeley and the UC system over the apartment complex – even though city leaders praised Christ for seeking to add on-campus housing.

Council members cited planning documents previously filed with the city under which the university forecast it would have a student enrollment of 33,450 by 2020. Instead, as of January, enrollment already stood at about 41,000 – more than 25 percent higher than what UC officials had predicted.

Since under state law, the UC campus doesn’t pay local property taxes, city leaders say Berkeley taxpayers are the ones who are saddled with the cost of this fast growth.

This enrollment spurt has led to “increasing burdens on our streets, police and fire services,” Berkeley Mayor Jesse Arreguin said in a news release.

But Christ has been conciliatory to city officials, suggesting the university sees a path to addressing City Hall’s concerns about campus enrollment growth.

Yet the Berkeley chancellor isn’t deferring to the faculty Senate. She’s moved ahead with plans to tear down the Upper Hearst parking structure. The building could be closed next month, and construction work could begin this September, according to stories in the Daily Californian student newspaper. UC Berkeley officials hope the new complex can be finished by summer 2021.

The belief that California has a profound housing crisis took hold in the state’s media and political establishments in recent years after Census Bureau statistics showed the Golden State had the highest effective rate of poverty once cost of living was included.

The view was amplified by stories about four-hour commutes forced by housing costs and about shocking numbers of poor college students who struggled to pay for food.

That’s why the decision last week by state Senate Appropriations Chairman Anthony Portantino, D-La Cañada Flintridge, to kill Senate Bill 50 – the latest attempt to spur housing construction by limiting local control of approvals
– came as a surprise to many. That included the bill’s sponsor, Sen. Scott Wiener, D-San Francisco. His push to ease rules to allow four-to-five-story apartment buildings near public transit centers and to allow construction of such units in many zones previously reserved for single-family homes had won support from not just developers but construction labor unions, several large-city Democratic mayors and some activist groups. Many were skeptics of Wiener’s and Gov. Jerry Brown’s previous attempts to limit local control.

Stories about Portantino’s decision focused on the fact that leaders of cities in his district, starting with Pasadena, had been vociferous opponents of Senate Bill 50. Reports also focused on the formidable influence of environmental groups, which prefer strict zoning rules to give them more clout to block development.

These arguments are common. In August 2016, when Brown’s attempt to sharply streamline the approval process for housing projects died in the Legislature, Shamus Roller, executive director of Housing California, blasted “the political gamesmanship of powerful interests.”

Californians ‘must be convinced of benefits’ of adding housing

But another view is that then-state Legislative Analyst Mac Taylor knew what he was talking about in March 2017 when he issued a report on the failure of local governments to meet housing mandates that said major change was unlikely “unless Californians are convinced of the benefits of more home building.” Instead of seeing the failure of housing reforms as a result of special-interest machinations, Taylor argued that elected leaders who backed such measures hadn’t cultivated the public support necessary to enact major changes.

Taylor’s thesis was supported by a USC Dornsife/Los Angeles Times poll of Californians released in October that found little belief that the housing crisis was due to a lack of building. It was the sixth-most cited reason, falling far behind the top two: the lack of rent control in much of the state and inadequate “affordable housing” programs. Two-thirds of those surveyed supported local control of housing approvals even if cities or counties weren’t meeting state mandates for new housing construction.

Still, Wiener said he wasn’t daunted by Portantino’s decision. He said he would bring another housing reform measure to the state Senate in 2020. The former San Francisco supervisor, a Harvard law graduate, also said he thought Senate Bill 50 had a chance of being resurrected this summer, even though appropriation chairs of the Senate and Assembly have a long history of making their decisions stick.

“We’re either serious about solving this crisis, or we aren’t,” he told reporters in Sacramento last week. “At some point, we will need to make the hard political choices necessary for California to have a bright housing future.”

In January 2017, state lawmakers returned to the Capitol determined to make a difference on the state housing crisis. Dozens of bills were touted – including Senate Bill 35, by state Sen. Scott Weiner, D-San Francisco, which ended up as the most far-reaching law to reduce obstacles to housing construction in modern California history.

But even as momentum built for SB35 and other housing measures, the head of the respected, nonpartisan Legislative Analyst’s Office warned in a 12-page report issued in March 2017 that state lawmakers would never be able to reduce the housing shortage without much more support from the public.

“Unless Californians are convinced of the benefits of significantly more home building – targeted at meeting housing demand at every income level – no state intervention is likely to make significant progress on addressing the state’s housing challenges,” wrote Mac Taylor.

Now a USC Dornsife/Los Angeles Times survey offers the most definitive support yet for the legislative analyst’s conclusion that when it comes to building new housing, Californians aren’t very enthusiastic.

Few see lack of construction as big problem

The survey asked 1,180 Californians why they thought housing was so expensive in the Golden State. They were given a list of eight possible primary reasons.

The most popular reasons were lack of rent control (28 percent) and lack of affordable housing programs (24 percent).

In the middle tier of explanations were environmental regulations (17 percent), foreign home buyers (16 percent) and the influence of the tech industry (15 percent).

Bringing up the rear were a lack of homebuilding (13 percent), Wall Street buyers (10 percent) and restrictive zoning rules (9 percent).

The Times’ analysis of the poll noted how at odds the public’s view of housing is with the view of economists, policy analysts and housing experts.

There is “general agreement that a lack of supply is at the root the problem. Reports from the state Department of Housing and Community Development, the nonpartisan Legislative Analyst’s Office and a host of academics contend that California has a chronic shortage of home building that has failed to keep pace with the state’s population growth – especially during the recent economic expansion – which has forced prices up.”

But this wasn’t the only way Californians parted with conventional wisdom. The survey also included other questions that showed two-thirds of those surveyed backed local control over housing even if local governments weren’t meeting state-set goals for adding housing stock.

It is this local power over the approval process that empowers motivated NIMBYs in city after city. Taylor’s March 2017 study identified it as the single biggest reason behind the emergence of the housing crisis.

“For decades, many California communities – particularly coastal communities – have used this control to limit home building,” the legislative analyst wrote. “As a result, too little housing has been built to accommodate all those who wish to live here. This lack of home building has driven a rapid rise in housing costs.”

Tech industry certain to keep pushing for housing 

While the USC-Times poll could influence candidates in close elections to side with NIMBY views, it is unlikely to blunt new efforts by the Legislature to use legislation to bring down housing costs. The deep-pockets, influential Silicon Valley Leadership Group is one of many business organizations that sees the housing crisis as a threat to the state’s future prosperity because of its potential to hurt recruitment and retention of workers.

Another of the state’s most politically potent forces – the California Teachers Association – also sees the housing issue as bad news for its members. But the CTA’s main policy prescription for now is Proposition 10 – the Nov. 6 ballot measure that would overturn a 1995 state law and let cities impose rent control. It has generally trailed in state polls, although with high numbers of undecided voters.

As CalWatchdog

Senate Bill 35 by Sen. Scott Weiner, D-San Francisco, requires cities that have not met their affordable housing requirements to approve projects that are properly zoned, pay union-scale wages to builders and have at least 10 percent of units in “affordable” ranges.

After months of objections from Cupertino elected officials and activists, in June, the city signed off on developer Sand Hill Property Company’s plan to convert the largely empty 58-acre Vallco Mall site to a huge multi-use project with 2,400 residential units, 400,000 square feet of retail space and 1.8 million square feet of office space

Given that 98 percent of cities have been found to have an inadequate supply of affordable housing, according to a state evaluation, the Cupertino precedent seemed potentially huge.

Two months later, new developments related to SB35 appear to point in the opposite direction.

Last week, Berkeley officials rejected a plan to use the law to fast-track approval of 260 apartments and 27,500 square feet of commercial space at 1900 4th Street just east of the Berkeley Marina despite evidence presented by developer Blake Griggs Properties that it was properly zoned and otherwise met SB35’s edicts.

City tactics in fighting project have familiar ring

The tactics that Berkeley is prepared to use mirrored the ways that construction projects have been fought in California for decades: raising a variety of legal objections that could cost developers millions of dollars because of delays, even if they have little or no validity or applicability.

Berkeley planning chief Timothy Burroughs said the project could not proceed because:

• It would have been built on land designated as a historical landmark because of a Native American burial ground. As a city with its own charter government, it is given deference in protecting its history.
•  It would have considerable low-income housing but not enough housing for those with very low incomes.
•  It would have increased traffic in the area in ways not allowed by city laws.

The objections were of the sort that Weiner sought to bypass with SB35. This is why the developer warned of a lawsuit earlier in the summer after the city put up roadblocks to approval.

But in a surprising move reported last week by the San Jose Mercury-News, West Berkeley Investors – part of the group backing developer Blake Griggs Properties – has backed out of the project without explanation. The assumption of many is that it saw the hassles as outweighing the chances for success.

The Mercury-News also reported that a spokesman for Berkeley City Hall said officials would welcome it if developers chose to reactivate a previous application that had far fewer residential units – 135 – and slightly more commercial space – 33,000 square feet.

In his Sept. 4 letter rejecting the latest version of the project, the city planning chief emphasized the historical significance of the Native American burial ground. Why that significance would lose weight in planning decisions if a smaller project were being considered was not explained.

But Burroughs pushed back against the idea his city was hostile to adding housing stock. He said 910 housing units have been built since 2014, 525 are now being constructed and 1,070 are cleared and in the pipeline.

But despite these obstacles, the Vallco Town Center project has obtained a crucial go-ahead from the city of Cupertino – providing perhaps the most telling example yet of the power and scope of Senate Bill 35, the measure by state Sen. Scott Wiener, D-San Francisco, that was enacted last year with the goal of spurring new housing construction.

The developer Sand Hill Property Co. plans to build 2,400 residential units, 400,000 square feet of retail space and 1.8 million square feet of office space at the mostly vacant 58-acre Vallco Mall property (pictured), which the company acquired in 2014. Half the residential units would fall in the affordable category.

SB35 requires cities that have lagged in meeting guidelines for new housing construction to approve properly zoned projects that have at least 10 percent affordable housing units, that pay union-scale wages to construction workers, and that meet other obligations. Cupertino is one of the nearly 98 percent of state cities that have not complied with housing construction obligations and are thus subject to SB35 fast-tracking, state officials said earlier this year.

On June 22, city planners notified Sand Hill that at the end of the initial 90-day review of the project provided for under SB35, it had been found “eligible for streamlined, ministerial review.” The developer must provide additional information during a second 90-day review process, but this is considered pro forma, and Sand Hill plans to begin construction in September.

Project may spur wave of makeovers of empty malls

The project may be a harbinger of more than just SB35’s usefulness in speeding up housing approvals. It could also signal a wave of makeovers of large shopping malls in California that were the centers of local commerce and social activities for decades but which have been hollowed out by the huge growth in online retailing.

The Vallco mall, which opened in 1976, long had nearly 200 tenants. Now only a few remain, including two restaurants, a bowling alley, skating rink and fitness center. Like many other declining malls in California, it is easily adaptable to housing and multi-use conversions because it has adequate parking and already-built infrastructure linking it to roads and mass transit. The mall is next to Interstate 280, on the other side of the freeway from Apple’s immense “spaceship” headquarters.

Even by Silicon Valley standards, Cupertino is among the most expensive cities for housing. Zillow’s latest data put its average home price at $2.36 million. Average apartment rents in May were $3,398, according to Rent Jungle.

Wiener told the San Francisco Chronicle he was “thrilled” to see the Cupertino project advance. It is likely to at least triple the number of housing units considered “affordable” in the 13-square-mile city of 64,000 residents.

Nevertheless, Cupertino Mayor Darcy Paul mostly stuck to his critical views of the project in a recent interview with the San Jose Mercury-News. He defended his comment in his February State of the City address that the housing crisis was exaggerated as being “technically” correct, lamented any reduction in local control of planning and said that his opposition was in sync with his constituents.

On a related front, Paul and other City Council members have expressed interest in imposing unique per-employee taxes on Apple to help cover the costs borne by the city because of the company’s massive long-term growth. Cupertino residents may be asked to vote on the tax next year.

A similar plan made national headlines in Seattle in May when the City Council voted unanimously to impose unique taxes on large employers like Amazon and Microsoft. Council members backed off last month after a backlash from both the business community and local residents.

A ballot measure that would repeal California’s 1995 state law limiting what properties can be subject to rent control seems certain to be on the November ballot after proponents submitted more than 565,000 signatures to state authorities last week, far above the minimum needed.

The measure’s lead sponsor is Michael Weinstein of the well-funded Los Angeles-based AIDS Healthcare Foundation, which is working with tenants rights groups and social justice activists and which sponsored two 2016 state initiatives. At a news conference this week, Weinstein and his allies depicted rent control as an obvious solution to a housing crisis that has pushed rent and mortgages higher for years without drawing a vigorous response from local and state officials.

“The rents are too damn high and we need local control to solve the problem,” Elena Popp of the Eviction Defense Network said at a rally in Los Angeles, according to a published report,

The measure would repeal the Costa-Hawkins Rental Housing Act of 1995, which banned rent control on housing units completed after its enactment and on existing single-family homes, duplexes and condos. The complex law imposed other limits as well, depending on rent-control provisions in individual cities.

Its passage came in the mid-1990s after developers backed by Republicans, planners and some community activists made the case that rent control laws adopted by 15 California cities after World War II – most notably Los Angeles and San Francisco – had had the effect of stifling new construction and leading landlords to skimp on renovations and repairs.

Economists and housing experts generally continue to see rent control as having a long-term negative effect on housing costs by making shortages more likely. A 2016 report by the Legislative Analyst’s Office agreed with this conventional wisdom.

But with average monthly rents for two-bedroom apartments soaring past $2,500 in most Southern California coastal counties and above $4,000 in San Francisco and parts of Silicon Valley, public interest in rent control increased. In November 2016, eight measures to control housing costs were considered by Bay Area communities. Four passed, included laws capping annual rent hikes in Oakland, Mountain View, Alameda and Richmond.

Focus on housing stock plays better with policy wonks than public

The idea that rent control is no real long-term solution to a problem that is rooted in a shortage of housing units remains the view of some prominent Democrats. Most notably, Gov. Jerry Brown supported 2017’s Senate Bill 35, which makes it more difficult to use regulatory tactics to block properly zoned housing projects with at least some affordable units. According to one analysis, SB35 will compel more than 97 percent of California’s local governments to build more housing.

But this medium- and long-term approach to addressing the housing crisis has played better with policy wonks than the general public. Frustration over California housing costs has been a staple of social media and in the letters sections of newspapers for years.

This has caught the attention of elected officials. Los Angeles Mayor Eric Garcetti once appeared to be in the camp of those who saw adding housing stock as the key to slowing or stopping the increase in rent and mortgage costs. In 2014, the possible 2020 Democratic presidential candidate committed his administration to approving 100,000 new housing units by 2021 and has bragged about already being nearly three-quarters of the way to his goal.

But Garcetti surprised some political observers by coming to this week’s L.A. rally for the statewide rental control initiative and offering strong support. According to a City News Service report, Garcetti used one of the favorite talking points of activists – depicting rent control as a way for average citizens and City Hall to scale back the power of corporate and other interests. “I’ve always believed that those who live closest to a given block or a street know what’s best. Local government should have control over their own city,” he said.

In a statement, Tom Bannon, CEO of the California Apartment Association, offered a starkly different assessment: “This ballot measure will pour gasoline on the fire of California’s affordable housing crisis. It will do exactly the opposite of what it promises – instead of helping Californians, it will result in an affordable housing freeze and higher costs.”

A new report on U.S. census data reinforces fears among Silicon Valley watchers that the world’s tech capital will struggle to maintain its prominence as it tries to attract and retain workers despite extremely high housing costs.

The Wall Street Journal report found that from July 2016 to July 2017, nearly 24,000 more people moved out of the San Francisco-Oakland-Hayward metropolitan area than moved in from the rest of California and the United States. This is only a tiny fraction of the 4.7 million people who live in the region, but the exodus is nearly twice the size of what was seen in 2015-16. And as the Journal noted, it wasn’t long ago – in 2013-14 – that net U.S. migration in the area was plus 15,000.

The recent population declines came as Silicon Valley and the Bay Area experienced heavy growth. Normally such economic booms create so many well-paying jobs that it overcomes housing scarcity issues. That’s what has happened in North Dakota because of the fracking boom, but it’s no longer the case in Northern California.

This issue is why the San Jose-based Silicon Valley Leadership Group in February released a report that said the region was unlikely to continue to lead the U.S. in creating tech jobs without a big change in the housing status quo. If an infusion of new units didn’t happen, the report warned that $3,000-a-month rents and $2 million tabs for tract homes would become a daunting long-term obstacle for the region – not just because of the difficulty of competing for workers with other tech hubs like Seattle, Boston and Austin but because Silicon Valley would be unable to attract workers for regular jobs like teachers, police officers and grocery clerks. Housing prices were estimated to be twice as high in Silicon Valley as in Seattle and Boston and four times as high as in Austin.

‘It’s surprising how long the party has continued’

An official with the Silicon Valley Leadership Group was among those interviewed by the Journal. “In some ways, given house prices, it’s surprising how long the party has continued,” Brian Brennan said. Not only is it “hard to get the best talent outside of this region to come here and stay here,” he said, but Silicon Valley’s cost of living may be “driving out all those people who don’t have those kind of skills.”

The Silicon Valley Leadership Group’s data bears out the region’s weak record on adding housing. While there was a 29 percent increase in payroll jobs from 2010 to 2016 in the region, housing stock only increased by 4 percent. While it is difficult to pin how much of an increase in “extreme commuting” – 90 minutes or more each way – that Silicon Valley is seeing, it’s estimated that average commutes were nearly 20 percent longer in 2016 than in 2010, and have likely gotten worse since 2016.

Census Bureau data released in recent weeks also showed the contrast between Silicon Valley and other parts of California.

While Southern California also has a housing crisis caused by high costs and scarcity, its population grew from July 2016 to July 2017 – particularly in two counties. Riverside County added 37,000 residents and San Bernardino added 20,000 residents, both among the higher gains of any U.S. county.

In the more populated counties of Los Angeles and Orange, residents increased about 13,000 each – a much lower percentage of growth than seen in the Inland Empire.

A recent Los Angeles News Group review of population forecasts from another source – the California Department of Finance – included predictions that may surprise residents who think that Los Angeles County and Orange County will be “built out” and unable to grow more before too long.

Instead, the Finance Department predicts that Los Angele County’s population won’t peak until 2052 – when it reaches 11.28 million – and that Orange County’s population won’t peak until 2055, which it reaches 3.62 million.