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California Faces Decisions on Rent Control

California housing leaders gathered in San Diego Thursday to seek solutions for the statewide housing crisis, including the push for local and state rent control measures before the November elections.

SAN DIEGO (CN) — California housing leaders gathered in San Diego Thursday to seek solutions for the statewide housing crisis, including the push for local and state rent control measures before the November elections.

Housing affordability advocates this summer secured the signatures needed to place Proposition 10, the Affordable Housing Act, on the statewide ballot. If approved by majority vote, the Affordable Housing Act would repeal the Costa-Hawkins Rental Housing Act, which limits California cities and other jurisdictions’ power to impose rent control.

The ballot measure followed a failed bill to repeal Costa-Hawkins this year, written by Assemblyman Richard Bloom, D-Santa Monica. That bill died in the Assembly Housing Committee.

On Thursday, Goldfarb & Lipman attorney Eric Phillips told the annual San Diego Housing Federation conference that while local jurisdictions have authorization to limit rent increases through rent stabilization policies, they cannot limit base rents that landlords set for new tenants.

That limitation could change, should the Affordable Housing Act pass.

Some California cities, including Mountain View in the Bay Area and Los Angeles, already have rent control policies: Both have an 8 percent ceiling by which landlords can raise rent each year.

David Garcia, policy director of the UC Berkeley Terner Center for Housing Innovation, said that while the debate on rent control is “very polarized and pegged as a choice between two extremes,” some evidence shows “hard” or strict rent control in places such as New York City or postwar European cities “very clearly” shows such programs had an impact on housing supply.

In California, pre-Costa-Hawkins cities that have rent control measures in place have also seen less construction of new homes, Garcia said.

Critics of rent control claim the policies stunt housing development and disincentivize landlords from keeping their properties on the rental market, prompting them to sell, further squeezing a tight rental market.

Garcia said he’s talked with developers who have put housing projects on hold while waiting to see the fate of the Affordable Housing Act. He called the rent control debate a “false choice,” saying polices can be created that offer greater tenant protections while also increasing the housing supply.

He added said that certain types of rent increases “clearly designed to evict tenants” should be outlawed, and said there is “broad consensus” there should be a statewide anti-gouging cap on rent increases.

“The vast majority of property owners are not raising the rent 10 percent every year. As business owners, they want stabilization, they don’t want turnover. If you see rent increases of 10 percent, it’s to get someone out,” Garcia said.

Phillips reiterated that when renters are effectively evicted due to rent increases they can’t afford, they could in effect “be evicted from an entire region, because you can’t find affordable replacement housing.”

Cities statewide already are considering whether they want rent control, and how it would look should the Affordable Housing Act pass, Garcia said.

Berkeley, which has pre-Costa-Hawkins rent control in place, has a companion ballot to extend rent control to single-family homes, which Costa-Hawkins outlaws.

Garcia said big cities such as Los Angeles and San Francisco will have to decide if they want to expand rent controls in the absence of Costa-Hawkins.

“Solutions to the housing crisis include building more units altogether,” Garcia said, suggesting that the supply of deed-restricted affordable housing also needs to be increased.

In a separate session discussing the past legislative session and looking forward to 2019, Western Center on Law and Poverty policy advocate Anya Lawler predicted the Affordable Housing Act will fail at the polls, but said that if the voting margin is close, “It puts a little bit more pressure for folks to come to the table.”

She suggested that the next Legislature consider repealing the provision of Costa-Hawkins that prohibits rent control on housing built after 1995.

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Categories / Economy, Government, Politics

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