Dive Brief:

• Twenty-three California mayors have come out in opposition against Proposition 33, a measure up for vote on California’s presidential election ballot on Nov. 5, according to the San Jose Spotlight. 
• If passed, Prop 33 would repeal the Costa-Hawkins Rental Housing Act, removing the state’s limits on rent control in local jurisdictions — including a ban on rent control in housing built after 1995. 
• It would also restrict the state from imposing rent control bans in the future, according to the California Legislative Analyst’s Office, a nonpartisan fiscal and policy advisor for the state legislature.

Dive Insight:

The Costa-Hawkins Rental Housing Act imposes three main limits on rent control laws in California, according to the LAO’s report on Prop 33. Rent control cannot apply to single-family housing or any housing built on or after Feb. 1, 1995, and local laws cannot dictate what to charge a renter when they first move in — they can only limit rent increases for existing renters. Prop 33, if passed, would remove these restrictions.

Rent in California is typically about 50% more expensive than in other states, up to double the national average in some areas, according to the LAO. The report attributes these high costs to a shortage of available housing.

Several cities have existing rent control laws within the confines of Costa-Hawkins, including Los Angeles, San Francisco and San Jose. Another state law, which expires in 2030, also prevents most landlords from increasing rents more than 5% plus inflation, up to 10% total, per year.

If Prop 33 is passed, the LAO anticipates that rent control may expand in some communities, leading to lower rents for some, higher rents for others, fewer homes available to rent and a decline in the value of rental housing. This, in turn, could reduce the property taxes paid by landlords by tens of millions of dollars per year, an amount that is less than 0.5% of all property tax revenue.

One of the mayors to oppose the proposition, San Jose Mayor Matt Mahan, said that many families are struggling because of the high cost of housing. 

“Prop 33 would make it harder for San Jose, and the state of California, to meet our affordable housing goals and help families wrestling with skyrocketing housing costs,” Mahan said in a statement provided to Multifamily Dive. 

Opponents of rent control, such as the National Multifamily Housing Council, state that an inability to raise rents will lead to a reduction in the available supply of housing, a lack of new construction and the deterioration of existing stock. 

“Without adequate supply, renters are faced with fewer and more expensive housing options in communities of choice,” the NMHC’s position reads.

Other California mayors opposing Prop 33 include San Diego Mayor Todd Gloria, Carlsbad Mayor Keith Blackburn, Chula Vista Mayor John McCann, San Marcos Mayor Rebecca Jones and Vista Mayor John Franklin, according to the Times of San Diego.