Rent control could be back on the California ballot in 2020

Reporting from Sacramento —  Proponents and opponents of rent control are prepping for another California ballot fight next year after the sponsor of a failed 2018 initiative was cleared to begin collecting signatures for a second try.

The new initiative, backed by the Los Angeles-based AIDS Healthcare Foundation, would similarly allow cities and counties to implement stricter rent control policies than currently allowed under state law. Michael Weinstein, the foundation’s president, said continuing increases in rents are leading to California’s recent surge in its homeless population and hurting millions of struggling tenants.

“It’s a stain on our state,” Weinstein said of housing affordability problems. “It’s really potentially the death of the California dream.”

The prospect of another rent control battle comes less than eight months after voters soundly rejected a previous measure on the ballot. Nearly 60% opposed Proposition 10, which would have repealed the state’s current limitations on rent control. The campaign topped $100 million with landlord groups out-raising the foundation and tenant groups more than 3 to 1.

Deb Carlton, senior vice president with the California Apartment Assn., said her organization would combat the new effort just as it did in 2018. The campaign against Proposition 10 argued that rent control would hurt investment in housing production, leading to a deeper shortage of available homes than exists in the state now.

“We will wage the same level of opposition that we did before,” Carlton said. “We think the voters get it and they’ll get it again.”

There are key differences between Proposition 10 and the new proposal. The prior measure would have done away entirely with the 1995 Costa-Hawkins Rental Housing Act, which prevents cities and counties from imposing rent control on single-family homes or on apartments built after that year, or earlier in Los Angeles and other cities that had existing rent control policies. Doing so would have allowed cities and counties to impose their own rent control rules.

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Rather than repealing Costa-Hawkins, this initiative would modify it. Should it pass, cities could opt into a rent control regime that would apply to all housing that is more than 15 years old. The rules would also require cities to limit how much a landlord could increase rents when a new tenant moves in, provided that it’s at least 15% over a three-year period. Property owners renting out two or fewer homes would be exempt.

If the initiative were to pass, cities with existing rent control rules would update to the new system automatically. So rent control in Los Angeles would immediately apply to all housing built in 2006 or earlier rather than in 1978 or earlier as it does today.

Weinstein said the changes to the initiative would make it more palatable to voters than the 2018 version. He expects the 2020 electorate will be more favorable to rent control than it was last year. He added that voters would be more motivated to pass the policy if lawmakers don’t approve measures to add stability for renters.

If lawmakers agree to strong renter protections, Weinstein said he’d pull back the initiative.

“This is a complicated issue that ought to be resolved by the Legislature,” he said. “It’s actually malpractice by the Legislature that nothing has been done already.”

Tenant measures have struggled to gain support at the Capitol this year, even though Gov. Gavin Newsom asked lawmakers to send him a package of bills on renter stability.

Already, lawmakers have shelved a proposal to allow local governments to control rents on properties more than 20 years old with exemptions for smaller landlords, and a separate measure requiring landlords to list a reason before evicting a tenant. What remains is a bill that would cap rent increases statewide at 7% a year plus inflation — but only for the next three years. That measure cleared the state Assembly last month and must pass both houses of the Legislature by mid-September.

Weinstein said passing that bill would be counterproductive, resulting in landlords simply increasing rents up to the cap.

Last week, the AIDS Healthcare Foundation contributed $400,000 to a campaign account for the initiative, an amount Weinstein said would go toward signature gathering. Supporters must collect valid signatures from 623,212 registered voters in California for the measure to qualify for the November 2020 ballot.

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