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These California Cities Could See Big Changes to Rent Control If Proposition 33 Passes
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These California Cities Could See Big Changes to Rent Control If Proposition 33 Passes

If Californians vote to approve a rent control measure on the ballot, thousands of Berkeley renters could immediately see new limits on how much their landlords can raise their rents each year.

“Families living in units that are not suitable for them will have the opportunity to move without losing their affordability,” said Leah Simon-Weisberg, a longtime tenant attorney and chairwoman of the city’s rental board. “For some people, this will allow them to have housing.”

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

Proposition 33 would repeal a state housing law that limits how cities can regulate rents, allowing local governments to make that decision. Most California cities would not see an immediate change. But in some cities like Berkeley, local laws already contain language that allows for much broader regulation than current state law. In those cities, and others where left-wing elected officials have expressed public support for expanding rent control, renters could see the benefits of Proposition 33 sooner, and landlords the headaches sooner.

More than 30 cities in California already put some limits on rent increaseswith limits ranging from 3% to 10% annually for covered units, some linked to inflation.

At the state level, California caps rent increases for corporately owned apartments and homes over 15 years old at 10% annually, a rate that tenant advocates say can still place a significant burden on tenants.

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 would repeal Proposition 33, known as the Costa-Hawkins Rental Housing Act, ended that, along with any rent controls 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 council member in Richmond, one of the few remaining Bay Area cities with a strong working class. Many families in his district rent their homes, he said, and some complain about steep rent increases.

“It’s hard to have a conversation 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 excludes any housing “exempt from rent control pursuant to the Costa-Hawkins Rental Housing Act.” Willis and other affordable housing advocates interpret that to mean that if Costa-Hawkins goes away, single-family homes and other housing that state law excluded would automatically be placed under rent control.

Nicolas Traylor, executive director of Richmond’s rental program, was more cautious. The ordinance could refer to units actually exempt under Costa-Hawkins, he said, or simply to the types of units, such as single-family homes, that Costa-Hawkins excluded. If Proposition 33 passes, he said, the rental program’s general counsel would have to recommend how to move forward.

In San Francisco, city supervisors avoided that ambiguity by unanimously approving legislation that would go into effect if Proposition 33 passes, raising rent control to about 16,000 additional units. Mayor London Breed has said she will sign it if the proposal is approved, the San Francisco Standard reported.

San Francisco belongs to 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 control that current state law especially limits. This is because Costa-Hawkins maintained any exemptions it had for newer-built units. Thus, in San Francisco, apartments built after 1979 are considered “new construction” and are exempt from rent control. In Los Angeles, it’s 1978.

“It is completely arbitrary that we can create rent control for buildings starting in 1978 but we can’t do it for 1980,” said Los Angeles City Councilman Hugo Soto-Martínez, pointing to the city’s homeless crisis. “Every year we continue to lose more rent-stabilized housing.”

Last week, the council passed a resolution, written by Soto-Martínez, endorsing Proposition 33.

Such actions by cities worry homeowners, who point out that their utility and insurance costs are rising, 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 rentals are too high.”

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

Opponents of Proposition 33 have also expressed concern that cities would impose rent control so strict that it stifles new housing construction at a time when the state desperately needs it.

“The state has done a lot to remove barriers to housing construction and incentivize the construction of affordable housing, but Proposition 33 would give NIMBY cities a really powerful weapon to end those rules,” said Nathan Click, spokesman for the No to campaign 33.

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

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

Manuel Pastor, director of the Equity Research Institute at the University of Southern California, said his research shows that rent stabilization without vacancy control helps prevent displacement by keeping rents more affordable while avoiding slowing down. new constructions since there are still incentives to build.

If cities start limiting rent increases when new tenants move in, he said, the effects become harder to predict. That’s in part because the last time California cities experimented with vacancy control was more than 30 years ago, when more multifamily housing was being built and before the tech boom put unprecedented pressure on the housing market. from Northern California.

One thing is likely, he said: California would see geographic variation, with more progressive coastal cities imposing stricter rent limits, while inland cities with moderate policies would seek to attract development with looser rules.

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