Election 2020: California strikes down rent control in ballot voting

Dhara Singh
·Reporter
·3 min read

California voters struck down a proposal to expand rent control on properties older than 15 years on Tuesday.

Proposition 21 would have taken the place of the Costa-Hawkins Rental Housing Act, which prevents cities from capping rent on buildings created after 1995. The bill would have also paved the way for local governments to limit rent hikes for vacant apartments, even if they didn’t match state limits.

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About 60% of voters voted against the bill, following a similar scenario two years ago when 59% of voters rejected Proposition 10, a bill for local governments to adopt rent controls on any types of housing. California still remains one of five states to have a method of rent control.

Protesters display placards while calling for support for tenants and homeowners at risk of eviction during a demonstration, Sunday, Oct. 11, 2020, on the Boston Common, in Boston, as the state weathers the ongoing COVID-19 crisis. The event was part of a series of actions across the commonwealth in support of the Guaranteed Housing Stability bill leading up to the expiration Massachusetts' eviction and foreclosure moratorium, which is set to end on Oct. 17. (AP Photo/Steven Senne)
Protesters display placards while calling for support for tenants and homeowners at risk of eviction during a demonstration, Sunday, Oct. 11, 2020, on the Boston Common, in Boston, as the state weathers the ongoing COVID-19 crisis. (AP Photo/Steven Senne)

“California has a housing supply problem - there simply aren’t enough homes to meet the demand, either to rent or buy, and rent control has been shown time and again to be an ineffective response to escalating home prices caused by an undersupply of housing,” said David Howard, executive director of the National Rental Home Council, a nonprofit organization representing the interests of single-family rental home industry.

Rent control is a fraught issue. One Stanford Business School study found that rent control worked against both small landlords and renters alike, according to Jonas Bordo, the CEO and Co-Founder of Dwellsy, the home and apartment rental marketplace.

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“By holding down pricing and limiting how landlords can redevelop properties, rent control has been proven to reduce housing supply and increase overall rents,” Bordo said. “Reduced rents and the prospect of reduced control over their properties cause many current or prospective landlords to either not rent units or not build new units.”

BOSTON, MA - OCTOBER 29: Demonstrators block the entrance to the courthouse during a rally at Boston Housing Court outside the Edward W. Brooke Courthouse in Boston on Oct. 29, 2020. Protesters called for the passing of bill H.5018, an act to guarantee hosing stability during the Covid-19 pandemic. (Photo by David L. Ryan/The Boston Globe via Getty Images)
Demonstrators block the entrance to the courthouse during a rally at Boston Housing Court outside the Edward W. Brooke Courthouse in Boston on Oct. 29, 2020. Protesters called for the passing of bill H.5018, an act to guarantee hosing stability during the Covid-19 pandemic. (Photo by David L. Ryan/The Boston Globe via Getty Images)

Because it’s very difficult to develop new properties in California, the state has been more landlord-friendly by protecting the interests of owners of existing properties versus allowing new development that could increase supply and reduce rents, he said.

If Proposition 21 passed, it could have heavily burdened struggling landlords during the pandemic due to the costs associated with ownership. Instead, the state should push for more affordable housing, Howard said..

“It’s time for sensible legislation that does one thing: creates more quality, affordable housing throughout the state,” Howard said. “When those costs increase – for things like property taxes, assessments, repairs – owners need to adjust rent accordingly. Rent control makes that impossible.”

Dhara is a reporter Yahoo Money and Cashay. Follow her on Twitter at @Dsinghx.

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