Rent Control: Knowing Who Your Friends Are

Timothy L. Coyle
Consultant specializing in housing issues

Now that the California Democrat Party has heartily endorsed the statewide ballot initiative to repeal the Costa-Hawkins Rental Housing Act that limits local governments’ ability to impose rent control, property owners should be asking gubernatorial candidate Gavin Newsom and any Party candidate they are thinking about supporting in November:  will you publicly repudiate the recent action by the Party?

After all, isn’t there a healthy moderate, business-friendly quantity of Democrats in Sacramento that’s poised to reject restrictive policies like rent control?  If there is, they must act.  If there isn’t, there should be, and they should be organized.

Certainly, the stakes in the rent-control fight are high enough and what the Democrat Party’s 330-member Executive Committee did recently in Oakland was atrocious.  Rent control – especially on newly constructed housing units – is among the most insidious of all public policies.  By limiting rental revenue for existing properties, rent control robs housing projects of a source of debt-service and money to keep up with repairs and deferred maintenance.  That’s not good for existing tenants or those just entering the rental market.

Costa-Hawkins provides a level of certainty for developers by exempting new construction and single-family homes from rent control.  It also permits vacancy de-control, which allows landlords to raise rents to the market rate when a unit becomes vacant.  If developers predict lower rents over time or there’s increased uncertainty about rent control measures, their projects may not work.

In the past, industry lobbyists could count on a group of Democrats who were unwilling to buy into the politics of rent control.  Indeed, past legislative efforts to repeal the law have been easily beaten back by unsympathetic lawmakers.  But, the Democrat Party may be changing.  The rent-control news comes on the heels of a National Review news story – featuring the vote of 65 percent of the state party to back left-leaning Kevin de Leon over California icon Diane Feinstein – asserting Democrats are throwing moderates in their party overboard.  And remember, we recently heard head Party man Tom Perez predict that socialism would guide the future of Democrats in America.

In a state whose politics are dominated by the far left, this is frightening news.  Regarding the ballot initiative, nearly half of California’s population is made up of renters and they are easily swayed by emotional tales of woe associated with the state’s dismal housing situation.  The endorsement also gives sponsors of the initiative access to email lists of Party voters, a spot on the slate cards endorsing the Democrat ticket and a share of the national Democrat Party’s campaign cash.

This is why California property owners and initiative opponents must act now.  They’d be well-served simply ask lawmakers and other Democrats to repudiate the Party’s recent action on rent control.

Incidentally, the chances are pretty good that there aren’t any Republicans running around the state advocating for local rent control and it’s highly doubtful that the state party would endorse the ballot initiative.  On the contrary.  It couldn’t hurt to ask the GOP leadership to denounce any measure to re-regulate rents.

So, property owners:  go ahead and keep your Democrat friends honest.  Call them up, today!

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