VOTE NO
Summary:
Proposition 33 seeks to repeal the Costa-Hawkins Rental Housing Act of 1995, which currently restricts local governments in California from enacting rent control on single-family homes, condos, and housing built after 1995. If passed, Proposition 33 would grant cities and counties broader authority to control rent for all types of housing, including new constructions and single-family homes. The goal is to curb skyrocketing rents in California’s housing market by expanding local rent control policies. However, opponents argue that it could worsen the housing shortage by discouraging developers from building new rental units.
Why We Strongly Oppose Proposition 33
Proposition 33 proposes repealing the Costa-Hawkins Rental Housing Act of 1995, allowing local governments to implement rent control policies on virtually all housing types, including newer buildings and single-family homes. While the intention is to make housing more affordable, evidence from other cities and states suggests that broad rent control policies will lead to counterproductive outcomes, ultimately worsening the housing crisis they aim to solve.
Historical Failures of Rent Control:
Rent control has been implemented in various cities across the United States, including New York City, San Francisco, and Washington D.C. In many of these places, rent control has led to significant distortions in the housing market:
- Decreased Housing Supply: By capping rental prices, rent control reduces the incentive for property owners to maintain or invest in rental properties. More importantly, it discourages new construction, as developers find it less profitable to build new housing under rent control policies. This leads to a long-term decrease in the availability of rental units, further tightening the housing market.
- Poor Maintenance and Quality: Property owners subjected to rent control often struggle to cover maintenance and renovation costs. As a result, tenants in rent-controlled units may face deteriorating living conditions over time, with landlords having less financial ability to make necessary improvements.
- Displacement of Non-Rent-Controlled Units: Rent control policies encourage owners of non-controlled units to charge higher rents to make up for potential losses. This contributes to making housing more expensive for new tenants or renters who do not qualify for rent-controlled units. Over time, fewer rental units are available, and the few that remain command sky-high prices, exacerbating the housing crisis.
Economic Impact and Job Loss:
Repealing Costa-Hawkins and allowing widespread rent control could cause significant economic damage:
- Property Values Decline: The value of rental properties typically falls when rent control is implemented, as the revenue potential decreases. Lower property values mean reduced property tax revenues, which hurts funding for local public services such as schools and infrastructure.
- Job Losses: With fewer housing units being built and landlords forced to operate on slimmer margins, there is less demand for construction and maintenance services. Economic studies show that rent control reduces investment in housing and can increase unemployment in industries tied to real estate.
Repeating Past Mistakes:
California voters have already rejected similar rent control measures twice in recent years: Proposition 10 in 2018 and Proposition 21 in 2020. Both measures sought to expand rent control, and both were soundly defeated because voters recognized the negative effects these policies would have on the housing market. Repealing Costa-Hawkins, as Proposition 33 proposes, risks repeating the same mistakes, further tightening the housing supply and making California’s affordability crisis even worse.
In conclusion, voting no on Proposition 33 protects California from the proven failures of rent control policies. While the goal of addressing housing affordability is essential, Proposition 33 is the wrong approach. Instead, Thrive LA PAC believes in fostering market-driven solutions that encourage more housing development, ensuring that supply meets demand and that prices stabilize naturally. Rent control is a short-term fix with long-term negative consequences, and we must resist the urge to enact policies that harm more than they help.