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What’s the “California Housing Freeze” Proposition on the November Ballot?

A rent control initiative titled the “Affordable Housing Act” — but criticized by others as the “California Housing Freeze” — has qualified as Proposition 10 on the November 2018 ballot.  What is it?

Proposition 10 would repeal the Costa-Hawkins Rental Housing Act, a 1995 law that prohibited cities from applying rent caps to single family homes and new construction built after 1995 (or, in San Francisco, 1979).

Proponents of Proposition 10 favor increased local local rent control measures as a method to rein in “runaway rents.”  But opponents believe the measure will strongly disincentivize new construction of affordable housing and further worsen the supply/demand imbalance.

Here are a few links to bring you up to speed:

  • “California Proposition 10, Local Rent Control Initiative (2018)” (Ballotpedia) — This post provides a thorough summary of Proposition 10, including its supporters and opponents.
  • “Signatures submitted to qualify Housing Freeze for November ballot” (California Apartment Association) — The California Apartment Association opposes Proposition 10 on the grounds that it would allow for “permanent” rent caps even on single-family homes, condominiums, and new construction, distort fair market value by artificially dropping the value of rent controlled properties, ruin investment properties by suppressing rental income, and vest too much power in local regulatory bodies.
  • “Rent control is no solution to our housing crisis” (Orange County Register) — This opinion piece makes the point that the best solution for escalating rents is to build more housing, but Proposition 10 would chill construction.  The article states: “But unless a vast proportion of the state’s population is going to be housed in Soviet-style government-owned apartments, the private-sector business of rental housing must be treated like any other business that offers goods or services to willing buyers. It cannot be subjected to price controls without the inevitable consequence of worsening shortages.”
  • “A single law is devastating the affordability of housing in California. Repeal Costa-Hawkins” (L.A. Times) — This opinion piece by a member of the L.A. Tenants Union states that increasing local rent control will reduce real estate “speculation and price gouging,” save tenants from eviction, and build “strong and stable communities.”   The article argues that given shrinking federal and state budgets, waiting for additional affordable homes to be built will take too long.
  • “Repeal the Costa Hawkins Rental Housing Act” (Tenants Together) — This tenants’ group article rallies against rental increases by “Wall Street landlords” who bought large volumes of single-family homes during the Great Recession, and advocates for more local control.
  • “Repealing Costa-Hawkins Can Only Make Things Worse For California Residents” (Forbes) — This article emphasizes that local rent control ordinances are easily “gamed” by those who are not low income, and Proposition 10 removes incentives to create new affordable housing.
  • “Strict Rent and Vacancy Control on the November Ballot” (San Francisco Apartment Association) — The San Francisco Apartment Association feels the same way about the measure as the State Association.  The article notes that for some properties the measure would allow for “vacancy control,” under which “landlords would be unable to raise rents on certain properties even after a tenant moves out.”  The measure would also, according to the article, cripple the supply of affordable housing: “Affordable housing construction is already under pressure since the elimination of state redevelopment funds ….  The Housing Freeze would make it even less likely that affordable housing developers can confidently pencil out these projects.”
  • “Berkeley prepares for potential repeal of Costa Hawkins Rental Housing Act” (Berkeleyside) — A Berkeley-centric perspective on the measure, including discussion of how Berkeley might apply its ordinances if the measure passes.
  • “Yes on 10: California Democratic Party Endorses Proposition 10 Campaign to Expand Rent Control” (The Registry) — This article describes how the state Democratic Party recently voted to endorse Proposition 10.