California Voters Eye Ballot for Housing Crisis Solutions

“Rent control is one of the few financially feasible and scalable policy tools available to address the immediate needs of those facing rents in the private market that are rising faster than incomes,” the analysis says.

The movement has recently garnered support from the California Democratic Party, the American Civil Liberties Union, California Teachers Association, and the U.S. Sen. Bernie Sanders-backed organization Our Revolution.

Voters are another story. A Sept. 26 poll by the Public Policy Institute of California found just 36 percent of likely voters support the measure, though another 16 percent were undecided.

Victor Ocampo, 24, of Los Angeles said he supports the idea for “relief for struggling renters” and bonds that will boost home construction in the state, but remains uninformed about the current propositions on the ballot.

“With work and school, I don’t have much time to research [ballot measures],” Ocampo said, adding that easy-to-digest voter guides would be most helpful for him at the polls.

Groups opposed to the measure – including realtor groups, private equity firms and, perhaps surprisingly, the California chapter of the NAACP – acknowledge California’s housing woes but say the measure will decrease the supply of rental units and stifle new home construction by scaring away investors.

University of California, Berkeley, economist Kenneth Rosen agrees. In his study “The Case for Preserving Costa-Hawkins” released this month, Rosen said single-family rent control could decrease property values by up to 15 percent and reduce the supply of single-family rental units.

Rosen found rent control could push property owners to convert their rental units into condos or for-sale units.

To allay developers’ fears, proponents point to state law that protects landlords’ right to a “fair rate of return” on their rental property. And they believe the state’s real estate market is large enough to keep investors from walking away.

But in a statement, Debra Carlton of the California Apartment Association said rent control would lead to an “exodus” of mom-and-pop rental owners – leading to “eviction notices instead of rent increases” for tenants.

Rosen backs Carlton’s claim, finding rent control could increase competition for available units and make it harder for low-income residents to find affordable housing.

In a statement, the California Association of Realtors, another main opposition group, said the California Legislature should finance construction of more housing units and “not introduce price ceilings.”

The group said rent control laws passed in San Francisco and Los Angeles have done little to address soaring housing costs and instead point to its ballot measure – Proposition 5 – which it believes will generate construction and sales of single-family homes.

Proposition 5 would amend state law to lower property taxes for mainly older, wealthier residents who built or purchased a second home.

The measure would also allow homeowners to buy or build a second home worth more than the home they’re selling but pay property taxes that are tied to the value of their old home.

It would also allow homeowners to transfer the property tax value under Proposition 5 to anywhere else in the state an unlimited number of times.

“Proposition 5 was written specifically to benefit seniors, the disabled and families impacted by natural disaster. It eliminates the moving penalty that prevents people from being able to move or downsize without a property tax spike,” the Yes on 5 campaign said in a statement. “Seniors and severely disabled men and women, many of whom are on a fixed income, are among Prop 5’s greatest beneficiaries.”

But a Budget and Policy Center analysis of the measure said it would result in an annual loss of $1 billion in funding for public services.

At the Oct. 10 Budget and Policy Center event, Veronica Carrizales of California Calls described Proposition 5 as a “sham” to benefit realtors.

“This measure doesn’t create new housing or help low-income seniors,” Carrizales said.

The California Association of Realtors did not immediately respond to request for comment.

Many housing advocates remain undecided on Proposition 2, which would authorize the state to sell up to $2 billion in bonds to build permanent housing with services attached for homeless people living with mental illness.

The conflict lies in the diversion of Proposition 63 funds that pay for other mental health services.

Building supportive housing could decrease state and local costs of using jails and emergency rooms in dealing with mental health crises, according to the Budget and Policy Center analysis.

“A key question for voters is whether [building] up to 20,000 supportive housing units outweigh the potential impact of a relatively small decrease in counties’ annual mental health funding,” the report said.

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