WHAT WILL IT DO?

Give local governments broader authority to implement rent control. Housing occupied by tenants for over 15 years and owners of 3 or more housing units with separate titles would now be eligible for governmental enforcement of rent-control.

Owners of only one or two single-title housing units would remain disqualified for governmental enforcement of rent control.

HISTORY:

Rent Control is when the government places a limit on the rent a landlord can demand for leasing a home or renewing a lease. Rent control policies are determined city by city, and legally cannot violate a landlord’s right to a fair return on their property.

Rent control is currently permitted in California under the Costa-Hawkins Rental Act passed in 1995 but power is limited. Government may only enforce rent control on owners of multi- dwelling housing (such as apartments) built before February1, 1995.  Properties with a distinct title such as condos, townhouses, and single-family homes are not currently eligible for government-enforced rent control.

In cities that choose not enforce rent control laws, the state rules apply. Under those rules, annual rent hikes are limited to 5 % plus the rate of inflation (though the total increase allowed maxes out at 10 percent). That means that if your rent is $1500, and the rate of inflation is 3 percent in LA County, your landlord could raise your rent up to 8% during lease renewal for a new monthly rate of $1620.

ARGUMENTS FOR:

Wages in California have not kept up with rental costs and half of all renters statewide spend more than 30% of their income on rent. High rents disproportionally and adversely affect low-income households, people of color, seniors, and families with children. COVID-19 has increased the state’s housing insecurity as millions of Californians face staggering unemployment. Cities need the power to enforce rental control in ways that make sense for their local community in the mission to make housing affordable for everyone

ARGUMENTS AGAINST:

Prop 21 would allow local governments to impose extreme and permanent policies that prevent rents from returning to market rates, even between tenancies. There is also a potential reduction in state and local revenues in the high tens of millions of dollars per year over time, depending on how rent control is enforced.

Moreover, the measure would drive down home values up to 20% and further the state’s chronic housing shortage during an unprecedented economic and public health crisis.