Rent control may roil 2018 ballot

So far, most of the sound and fury in California politics has revolved around candidates.  But there are increasing signs that ballot initiatives may trigger additional uproar in 2018.

The latest November filing is an effort to remove a 20-year barrier to local rent control, the Costa-Hawkins Rental Housing Act.

Costa-Hawkins, passed in 1995, restricts the ability of local governments to impose rent control. Sponsors of the repeal initiative have dubbed their measure the “Affordable Housing Act.” The measure, if final approval is given to circulate petitions, needs 385,880 valid signatures of voters collected within a six-month window to qualify for the ballot.

The initiative’s proponents filed on Oct. 23 and the Association was out with an opposition statement the same day, apparently within minutes.

In documents filed with the state attorney general, backers of the proposed initiative argue that median rents in California are higher than anywhere else in the country. More than half of California renter households pay more than 30 percent of their income on housing costs and one-third of renter households pay more than 50 percent of their income on rent, proponents argue.

“Three times as many Californians are living in overcrowded apartments as compared with the U. S. as a whole,” say the initiative backers.

The California Apartment Association lost no time in voicing opposition. The initiative’s proponents filed on Oct. 23 and the Association was out with an opposition statement the same day, apparently within minutes.

“If local rent control ordinances are allowed to regulate rents on new construction and single-family homes, new private investment into rental housing will come to a screeching halt,” said Tom Bannon, the Association’s chief executive officer. He said that in effect, California’s economic expansion “will come to a standstill” if Costa-Hawkins is repealed.

Costa-Hawkins is “landmark legislation that protects property owners and renters from radical, local rent control measures,” the Association declared.

Lotus Lou, spokeswoman for the California Association of Realtors, said this:

“… however well-intentioned, rent control is nothing more than a thinly veiled version of government-mandated price control and doesn’t work.

“Both San Francisco and Los Angeles have rent control policies that have done little, if anything, to rein in rental costs. San Francisco’s median home price is $1.4 million, and the average apartment rent $3,803. In Los Angeles, those numbers are $899,000 and $2,964, respectively,” Lou said.

Filing an initiative is a time-honored way to get the Legislature to pass a desired bill.

“Mandating artificial prices for rental units reduces the supply of rental properties and creates an economic hardship for low-income and disadvantaged families. That is one of the many reasons why rent control is prohibited in 27 states, including Washington, Oregon, Arizona, and Texas,” she added.

Under Costa-Hawkins, governments cannot regulate rents on single-family homes, condominiums and townhouses. The act also requires all rent control ordinances to allow a landlord to set a new rent at market rate once a tenant moves out and a new tenant moves in, a policy known as vacancy decontrol.

“We were disappointed that the California Legislature didn’t move on it in 2017, by passing AB 1506 (Richard Bloom, D-Santa Monica), which would repeal the law,” said Damien Goodmon, director of the Aids Healthcare Foundation’s “Housing is a Human Right” project.

“However, Assemblymember Bloom’s bill is a two-year bill, so we are hoping the Legislature does the right thing and moves it forward in January … This week’s filing for Title and Summary for the planned statewide ballot measure to repeal Costa-Hawkins keeps the door open in the event the Legislature fails to act by adopting AB 1506,” Goodmon said.

Filing an initiative is a time-honored way to get the Legislature to pass a desired bill. It can be used as a threat to motivate lawmakers: “Pass this bill, or we’ll come up with an even more draconian measure via the initiative route” is a tactic lobbyists have used for decades.

Bloom suggested that a looming initiative might spur action on his bill but cautioned that the initiative route may not be an ideal way to solve a problem.  In an email to Capitol Weekly, he said:

“Rents are skyrocketing in communities across the state and people are fed up. The filers of the initiative to repeal Costa-Hawkins and the galvanizing support by tenant groups up and down the state, is a clear indication that housing costs have reached a boiling point.  People want change and they do not believe that the support for changes to our rent control laws will materialize in the Legislature …,”  he said.

Four measures, including a $4 billion bond measure for parks, environmental protection, and water infrastructure are on the June 5 primary ballot. The November 6 ballot already includes a $4 billion bond act, the “Veterans and Affordable Housing Act of 2018.”

There is little doubt that, very soon, you will see support building for this proposal.

“At the same time, while I understand why some want to put this change on the ballot, it is never ideal to address a complicated issue like this through the initiative process,” Bloom said.  “First and foremost, the initiative process is a simple up or down vote that does not allow for any public input, shuts down dialogue amongst stakeholders, and prevents anyone from making changes to address any concerns raised by those impacted by the proposal.

“Secondly, if there are unintended consequences down the road that need to be fixed, it will require a 2/3 vote of each house of the Legislature – a threshold not easily achieved.  For these reasons, something this complicated is better left to the legislative process.  AB 1506 remains a vehicle for responsible dialogue and, I hope, legislation that will ease the economic burden that is affecting so many Californians.”

Twenty-three November ballot measures are awaiting action from the attorney general’s office, which is charged with preparing a ballot title and summary of the proposal and certifying it for signature-gathering. Subjects range from repealing an increase in the state’s tax on gasoline to repeal of the top-two primary initiative.

(Four measures, including a $4 billion bond measure for parks, environmental protection, and water infrastructure are on the June 5 primary ballot. The November 6 ballot already includes a $4 billion bond act, the “Veterans and Affordable Housing Act of 2018.”)

The path to ultimate voter approval of an initiative is not an easy one.

The California History-Social Science Project, headquartered at UC Davis, tells us that as of May 2016: “In the 100+ years since the initiative began in California, close to 2,000 statewide initiatives have been titled and circulated for petition to be eligible to be placed on the ballot, but only 363 initiatives have qualified for the ballot. Of this smaller number, only 123 initiatives were approved by voters and adopted into California law.”

Initiative backers have 180 days to collect signatures after the “summary date” – the date that the attorney general’s office provides the proposal’s summary to the sponsor following its review, along with reviews of fiscal impacts from the Department of Finance and the Legislative Analyst.

Ballot proposals to veto laws passed by the Legislature have a circulation deadline of 90 days after the legislation targeted by the referendum is signed by the governor.

After the attorney general’s review and “summary date,” initiative sponsors must collect signatures equal to at least 5 percent of the total votes cast for Governor at the last gubernatorial election.  For the 2018 election, that means 365,880 valid signatures during the 180-day period.