Some affordable housing advocates just don’t get it.  They keep trying to convince state voters that rent control is a good thing.  It’s not.  And a strong majority of Californians agree. 

It’s particularly shameful that strong backing for Proposition 21 – this year’s rent control initiative – came from those in the state legislature who have been wringing their hands lately about California’s affordable housing crisis – a crisis of inadequate supply, not runaway rents.  They should know better.  Regrettably, they don’t.

They fail to recognize that rent control is a form of taxation.  And, they fail to accept a basic tenet of economics:  the more you tax a product the less of that product you get – not a good policy to get more housing built.

They also fail to regard the many other housing-hostile impacts of government’s deliberate intrusion into private housing markets through rent control.  For example, do they know that rent control leads to substandard housing?  

Consider that by limiting regular income to the property, rent control constrains the ability of the owner to make improvements – like putting on a new roof or new doors.  How about installing energy-efficient windows?  Not under rent control.  And, forget about deferred maintenance getting proper attention.

Or, what about having enough rental income to pay the bills?  Like the one from the plumber?  The electrician?  The bank?  The tax man?  

“Owners of rental property can afford it” proponents of rent control say.  “They’re just rich folks or wealthy corporations” who own rental housing in California.  Wrong.  Most landlords are the Mom and Pop type – of limited incomes and owning just one or a few properties.

And, what does statewide rent control signal to an investor in new housing?  A limit to his or her return on investment (ROI), for one.  An extra staffer (maybe more than one) to deal with dozens of new rent control boards, is another.

Finally, in an environment like California, where demand is soaring, rent control – a production-inhibitor, a real constraint on supply – makes the housing that remains so much more scarce and expensive.  

These obvious defects have been largely ignored by the California legislature in the past.  Many lawmakers still believe that they can righteously write laws that tinker with private housing markets – and dictate outcomes from Sacramento – in the name of affordable housing and spirit of providing it.

But, they’ve been wrong before and in 2020 they were wrong again.

Most California voters know the dangers of rent control.  They showed it again this year after facing a similar measure, Proposition 10, in 2018.  Nearly 60 percent of state voters said NO to Proposition 21.

For their opposition, a broad coalition of rivals to the ballot measure was rewarded with a compelling victory.  A tip of the hat goes to the California Apartment Association (CAA) for stringing together Governor Gavin Newsom, the NAACP and representatives of business, labor, media and military as the principal backers of the NO campaign and to the Apartment Association of Greater Los Angeles (AAGLA) which despite having had local rent control in their backyard for decades – continuing today – provided ever-important grassroots support.

Sponsors of the statewide rent control will likely try again.  When they do it is imperative that an even greater group will band together to oppose it.