These California cities could see big changes to rent control if Prop. 33 is adopted

If Californians vote in favor of a rent control measure, thousands of tenants in Berkeley could immediately see new limits on how much their landlords can raise their rent each year.

“Families living in units that don’t suit them will have the opportunity to move without losing affordability,” said Leah Simon-Weisberg, a longtime tenant advocate and chair of the city’s rent board. “For some people, it will keep them housed.”

That same scenario, in which the city could limit rent increases for single-family homes and apartments more than 20 years old and units with new tenants, is a nightmare for Krista Gulbransen, head of the Berkeley Property Owners Association, which represents the city’s landlords. “We would go back to the 1980s and it wouldn’t just be roller skates or rainbow headbands, it would be much worse,” she said.

Proposal 33 would repeal a state housing law that limits how cities can regulate rents and let local governments make that decision. Most California cities would see no immediate change. But in a few cities like Berkeley, local laws already include language that allows for much more sweeping regulations than current state laws. In those cities, and in others where left-leaning elected officials have expressed public support for expanding rent control, renters could benefit most quickly from Prop. 33 – and landlords get headaches most quickly.

Already more than 30 cities in California setting certain limits on rent increaseswith maximums ranging from 3% to 10% per year for covered units, some of which are linked to inflation.

At the state level, California limits rent increases for apartments and commercial properties more than 15 years old to 10% per year — a rate that tenant advocates say could still place a significant burden on renters.

Some of those local ordinances were once much stricter. In the late 1970s and early 1980s, concerns about rising housing costs led some cities to limit rent increases even when a new tenant moved in – known as vacancy control. But the 1995 law that passed Prop. 33, known as the Costa-Hawkins Rental Housing Act, would end that, along with any rent control on single-family homes or homes built after 1995.

It’s the ban on rent control for single-family homes that most bothers Melvin Willis, a city councilman in Richmond, one of the few remaining true working-class cities in the Bay Area. Many families in his district rent out their homes, he said, and some complain to him about steep rent increases.

“It’s a hard conversation to have with someone when they say, ‘My rent went up, but we have rent control,'” he said. Willis recalled explaining to a family whose rent had doubled that the city’s 3% limit on rent increases does not apply to single-family homes. “I’ve had that conversation several times and it doesn’t feel right,” he said.

Richmond’s rental ordinance disregards any properties that are “exempt from rent control under the Costa-Hawkins Rental Housing Act.” Willis and other affordable housing advocates think this means that if Costa-Hawkins leaves, single-family homes and other properties that state law excludes would automatically fall under rent control.

Nicolas Traylor, the executive director of Richmond’s rental program, was more cautious. The ordinance could refer to units that are actually exempt under Costa-Hawkins, he said, or just the types of units, such as single-family homes, that Costa-Hawkins excluded. As Prop. 33 is passed, the rental program’s general council should recommend how to proceed, he said.

In San Francisco, city supervisors sidestepped this ambiguity by unanimously passing legislation that would take effect as Prop. 33 is passed, bringing rent control to an estimated 16,000 additional units. Mayor London Breed said this she will sign it If the proposal is adopted, the San Francisco Standard reports.

San Francisco is among a group of cities — along with Berkeley, Oakland, Los Angeles and the Southern California cities of West Hollywood and Santa Monica — with long-standing rent controls limited mainly by current state law. That’s because Costa-Hawkins grandfathered in any waivers they had for more newly built units. So in San Francisco, apartments built after 1979 are considered “new construction” and exempt from rent control. It’s 1978 in Los Angeles.

“It’s completely arbitrary that we can establish rent control for buildings starting in 1978, but we can’t do that before 1980,” said Los Angeles City Council Member Hugo Soto-Martínez, pointing to the city’s homelessness crisis. “Every year we lose more and more of our rent-stabilized housing.”

The council last week passed a resolution authored by Soto-Martínez endorsing Proposition 33.

These kinds of actions by cities are alarming landlords, who say their utility and insurance costs are rising and, in some cases, outpacing inflation.

In an email newsletter sent to housing providers on Friday, real estate firm Bornstein Law warned its clients that “there is a real possibility that Proposition 33 will pass due to the widespread belief that rents are too damn high.”

The company urged landlords, in preparation for the possible policy change, to “increase rents to market rates if landlords are able to do so” and to consider offering voluntary buyouts to tenants paying below market rents.

Opponents of Prop. 33 have also expressed concern that cities will implement rent control so tightly that it will stifle new housing construction at a time when the state desperately needs it.

“The state has done so much to remove barriers to home building and encourage affordable housing, but Prop. 33 would give NIMBY cities a really powerful weapon to end those rules,” said Nathan Click, a spokesperson for the No on 33 campaign.

But San Francisco shows that, given the flexibility to develop new policies, even cities with a strong history of tenant advocacy could opt for more modest rent control changes that could win broad political support. Board of Supervisors Chairman Aaron Peskin had originally proposed that the city extend rent control to housing built before 2024, but backtracked on that in 1994, an idea that drew support from both the progressive and moderate wings of the council. city ​​government.

Expanding local rent control “will depend not only on tenant and housing organizations, but also on other community organizations in those communities,” said Shanti Singh, legislative director of Tenants Together. “Will they be ready or willing to push for it?”

Manuel Pastor, director of the University of Southern California’s Equity Research Institute, says his research shows that rent stabilization without vacancy controls helps prevent displacement by keeping rents more affordable, while at the same time preventing new construction from slowing down because there are still there are always incentives to build.

If cities start limiting rent increases as new tenants arrive, the effects will become harder to predict, he said. That’s partly because the last time California cities experimented with vacancy control was more than three decades ago—when more multifamily housing was being built and before the technology boom put unprecedented pressure on Northern California’s housing market.

One thing is likely, he says: California would see geographic variation, with more progressive coastal cities enacting stricter rent caps while inland cities with moderate politics try to entice development with looser regulations.

“As proponents of Prop. 33 think this will solve our housing crisis, they are wrong,” he said. “If the opponents of Prop. 33 think this will result in a housing armageddon, they are wrong too.”