A new measure that would allow municipalities to enact rent control laws on more residential units is headed for the November ballot. Secretary of State Alex Padilla certified the AIDS Healthcare Foundation-backed initiative, dubbed the Rental Affordability Act, on Feb. 3. The new ballot measure follows the defeat of a similar proposal in 2018, Proposition 10, which voters rejected by a margin of nearly 20%.
“We cannot continue to allow tenants to be constantly pushed out of their homes without continuing to perpetuate the housing affordability and homelessness crises that we’re seeing in the state of California,” said René Moya, campaign manager for the ballot measure and executive director of the nonprofit Housing Is A Human Right, a division of the AIDS foundation.
“We keep asking, ‘Why is homelessness getting worse?’ It is getting worse because we are still not doing anywhere near enough to protect people and keep them in their homes.”
The ballot initiative would replace the Costa-Hawkins Rental Housing Act, a law that prohibits municipal rent control regulations for properties built after 1995. If passed, local governments could adopt rent control laws for buildings that are less than 15 years old, the same sliding scale used by Assembly Bill 1482, a statewide set of renter protections that cap annual rental rate increases to 5% plus inflation after going into effect Jan. 1 of this year.
The proposal also would allow for local ordinances limiting rental increases when a unit is vacated by a tenant, a regulation that Apartment Association of Greater Los Angeles Executive Director Daniel Yukelson describes as an “absolute killer” for the apartment industry.
“There are a lot of owners out there who have rents that are way below market [rate],” Yukelson said. “Because of price controls in place under various rent stabilization ordinances, it’s impossible to catch up. The only chance they have . . . is when they have vacant units and they can raise the rent to market.”
If passed by voters and adopted by local governments, the Rental Affordability Act would limit landlord’s ability to raise rent on a vacant unit to no more than 15% over the following three years in addition to other increases allowed under a local ordinance, such as inflation. Single-family homes and condominiums are exempt under Costa-Hawkins and AB 1482; however, the ballot measure would include such rental properties if the landlord owns more than two residences.
“If we don’t do something to help people stay in their homes, ultimately the people who pick up the tab for that are the taxpayers,” Moya said. “There is a balanced approach to take to protect more tenants and to keep those folks in their homes. That is a cheaper option than having to constantly rehouse people as they’re falling into homelessness as a result of skyrocketing rents.”
The full text of the Rental Affordability Act notes that more than 17 million Californians are renters, with the state’s homeownership rate at its lowest level since the 1940s. Additionally, the initiative states that one-third of California renters spend more than 50% of their income on rent, while many others pay 30% of their income on rent.
Leading up to the 2018 vote on Proposition 10, a combined $100 million was spent by proponents and opponents of the initiative, according to the association. In a statement following the certification of the ballot initiative, Yukelson said it would be more beneficial for the association and nonprofit to work together to spend money on creating housing rather than “littering front yards and airwaves with more advertising on an issue that has run its course.”
“We need to build more housing units and [this initiative] is only going to discourage that,” Yukelson told the Business Journal. “To defeat this, we’re going to have to raise another $80 million or so to put up against Weinstein’s $25 or $30 million. It’s an incredible waste of money. We could be building houses.”