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California Measure To Expand Rent Control Fails

In this Jan. 7, 2020, file photo, men hold up signs at a rally outside of Cit...

Credit: Associated Press

Above: In this Jan. 7, 2020, file photo, men hold up signs at a rally outside of City Hall in Oakland, Calif.

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UPDATE: 10:29 a.m., Nov. 4, 2020

Proposition 21, which would let California cities expand rent control, failed early Wednesday. “No” votes led with roughly 59% of votes counted.

Original Story

A measure that would let California cities expand rent control was trailing in early returns on Tuesday.

Proposition 21 would let cities limit rent hikes on properties that are more than 15 years old. People who own one or two single-family homes would be exempt.

“No” votes were leading with about 57% of more than 5.5 million votes counted. Millions more votes still need to be tallied.

Proponents contend the measure is an urgent attempt to slow spiraling rent increases that lead to crowding and homelessness. Opponents argue that the measure would discourage new home construction at a time when it is sorely needed for California's 40 million people.

The state has been grappling with rising housing costs for years, and Gov. Gavin Newsom last year approved a decade-long limit on rent increases to 5% a year plus inflation. That law — which came after a more expansive rent control proposition was rejected by voters in 2018 — also barred landlords from evicting tenants without a reason.

Kitty Bolte, a member of the Sacramento Tenants Union, welcomed the rent hike cap but said it doesn’t do enough for places like her community, where many rent single-family homes that aren’t covered by the law.

She said her group often fields calls about uninhabitable conditions, but tenants are afraid landlords will retaliate with rent increases if they complain. That’s one of the reasons she is backing the measure.

“Most people are afraid to exercise those rights because they’re not confident what is currently available will protect them,” Bolte said. “The more places that are covered, the more places people have to go.”

David Cordero, executive director of the Apartment Association of Orange County, opposes the measure and said it could lead to fewer rentals, not more. Putting strict limits on small landlords — even when their tenants change — could lead them to let properties languish rather than invest in their upkeep, he said. Or, Cordero said, they could decide to get out of the rental business and sell to new homeowners.

“It’s expensive to live in California, but it’s also expensive to own and operate a business,” he said, adding most of his group's 2,000 members are individuals or small management companies. “This is not a situation where you have apartment owners rolling in cash based on what they're charging in rent. Their costs are also going up.”

The measure backed by the AIDS Healthcare Foundation aims to blunt the impact of a more than two-decade-old state law that blocks new rent control measures from applying to properties built since 1995.

The state's Democratic Party supports Proposition 21, but Newsom is opposed. The Democratic governor said the proposal could damp efforts to create more affordable housing and that last year's law already caps rent hikes.

Other opponents include the California Apartment Association and state Republican Party.

Both sides agree more affordable housing is needed. Home prices have soared in California, while the median rent rose 18% from 2010 to 2019, about twice the nationwide increase, according to a recent report by researchers at the University of Southern California.

More than half of California’s renters spend over 30% of their income on rent, the report said.

Since the coronavirus pandemic, many out-of-work Californians haven’t been able to pay rent and the state has granted eviction relief through January to those who can’t pay in full.

Some cities, especially large, coastal ones like San Francisco, have seen rent declines this year, while some smaller, more affordable cities have seen rent growth as people seek more space for remote work, according to the rental website Apartment List.

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