Door slams on rent control

Why Prop. 10 failed in California

Gloria Cortez spoke out for Prop. 10. Her family was “evicted by rent increase” after she complained about mold. PHOTO: Yes on 10
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With skyrocketing rents, a disastrous housing shortage, and a blue wave cresting in the political arena, a pro-rent control measure should have been a shoo-in on California’s November 2018 ballot.

But Proposition 10, which would have overturned the notoriously pro-landlord Costa-Hawkins Rental Housing Act, went down in flames. Why did nearly 60 percent of California’s voters reject the possibility of capping rent increases?

A contentious history. Limits on raising rents during out-of-control inflation, economic recessions, or war are not new. Most of the United States was under federal rent control during and shortly after World War II. It survived only in New York and a few other pockets until the 1970s when high inflation and housing shortages caused rents to soar.

Today, rent control in some form exists in New York, New Jersey, Maryland, California, and the District of Columbia.

Real estate developers, landlords, and big business wage incessant war against attempts to limit their profits.

Californians won rent control in Los Angeles (1978), San Francisco (1979), and Oakland (1980). But in 1995, a bi-partisan state legislature passed Costa-Hawkins. It prohibited local governments from enacting rent control on any single-family homes, condominiums, or townhouses and on multi-unit apartments built after 1995. It also banned vacancy control regulations limiting how much landlords can raise the rent when leasing to new tenants. Without this, rising market rates create a powerful incentive for evictions.

Housing disaster. Currently, California has a housing shortage of over 3 million units. The state has 12 percent of the country’s population but 22 percent of its homeless people. Rents are higher than any other state, and three times as many people live in overcrowded apartments. Since the 2008 recession, big banks and Wall Street conglomerates have bought up thousands of single-family homes which they rent at exorbitant rates.

Rent is deemed not affordable if tenants spend more than 30 percent of their income on housing. But 54 percent of Californians spend more than 30 percent, and a third spend more than half. Black and Latino households are twice as likely as white households to rent and far more likely to pay unaffordable rents.

Confronted with clients and community members forced into desperate living conditions or homelessness, the AIDS Healthcare Foundation, Eviction Defense Network, and Alliance of Californians for Community Empowerment joined forces to draft Proposition 10, the Affordable Housing Act. They began the campaign in early 2018, after the legislature’s Housing and Community Development Committee failed to forward a bill to overturn Costa-Hawkins.

What went wrong? Prop. 10 was a limited reform. It did not create or require rent control anywhere in California. It would merely “restore the right of local communities to set fair limits on rent increases on all types of homes in order to address the state’s housing affordability crisis.”

Under the slogan: The rent is too damn high!, the Yes on 10 Campaign argued that everyone should have a safe, healthy, and affordable home. Prop. 10 was not a full solution, but it could have provided some relief.

What caused the stunning defeat of this much needed survival reform? First was the nearly $75 million spent by the opposition — developers, landlords, and corporate interests.

Supporters raised only a third as much, 90 percent of it from AIDS Healthcare Foundation and almost $1 million from The California Teachers Association, California Nurses Association, and AFSCME Local 3299.

Second was the No on 10 Campaign, led by the California Business Roundtable, which waged a deceptive campaign that created fear and confusion.

Seeing broad public support for rent control, they didn’t launch a direct assault. Instead, they snuggled up to the victims of the crisis and pretended to be on their side. They hammered incessantly on the message that Prop. 10 was deeply flawed and “would make the housing crisis worse,” flooding the media with pictures and comments from people of color and seniors who claimed that Prop. 10 would hurt them and decrease the housing supply.

Third was treachery from Democratic politicians and Labor and community leaders. Most Democrats were afraid to risk supporting such a controversial issue. Gavin Newsom, the successful Democratic candidate for governor, openly opposed it. Unions spent far more time and money on electing Democrats than on Prop. 10.

Shockingly, the California NAACP opposed Prop. 10. Not coincidentally, their president, Alice Huffman, owns a consulting firm that made $800,000 for opposing the measure.

Despite heroic Yes on 10 efforts by left and grass-roots organizations, insufficient resources in the proponents’ camp also contributed to the defeat. Eviction Defense Network Director Elena Popp explained that they lacked sufficient on-the-ground field operations to educate new and infrequent voters, who are largely renters.

What next? The catastrophic conditions that spawned Prop. 10 remain. But the campaign exposed the naked greed of landlords and big business and government’s subservience to those interests.

In Los Angeles, FSP initiated and is working with others to build the End Homelessness Now-LA campaign. It demands that city and county governments deploy their vacant and underused properties to create permanent, supportive public housing for the 50,000 people without homes in the county.

Housing is a right. Broad labor and community pressure is needed, not only to curb profiteering, but to compel governments to build and operate high-quality, affordable publicly-owned dwellings for all.

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