California Proposition 10, Local Rent Control Initiative (2018)
California Proposition 10, the Local Rent Control Initiative, is on the ballot in California as an initiated state statute on November 6, 2018.
What is California Proposition 10?
Proposition 10 is an initiated state statute that would repeal the Costa-Hawkins Rental Housing Act (Costa-Hawkins), thus allowing counties and cities to adopt rent control ordinances that regulate how much landlords can charge tenants for any type of rental housing. Proposition 10 would also state that a local government's rent control ordinance shall not abridge a fair rate of return for landlords.
What is the Costa-Hawkins Rental Housing Act?
Costa-Hawkins is a state statute that limits the use of rent control in California. Costa-Hawkins provides that cities cannot enact rent control on (a) housing first occupied after February 1, 1995, and (b) housing units where the title is separate from connected units, such as condominiums and townhouses. Costa-Hawkins also provided that landlords have a right to increase rent prices to market rates when a tenant moves out. Prior to the enactment of Costa-Hawkins, local governments were permitted to enact rent control, provided that landlords would receive just and reasonable returns on their rental properties. The California State Legislature passed Costa-Hawkins in 1995.
What does the political landscape surrounding housing look like in California?
Candidates in the 2018 gubernatorial election have proposed plans to increase housing in California. Gavin Newsom (D) called for “a Marshall Plan for affordable housing," while John Cox (R) said that some development regulations need to be eliminated to incentivize construction and decrease costs. Neither Newsom nor Cox, however, support a full repeal of Costa-Hawkins. Newsom said he was open to fewer restrictions on rent control, but that outright repeal would "have unintended consequences on housing production that could be profoundly problematic." Cox stated, "I don't believe rent control works." The California Democratic Party's executive committee endorsed Proposition 10, while the California Republican Party's leadership decided to oppose the ballot initiative. Amy Schur, campaign director for the Alliance for Community Empowerment (ACCE), responded to opponents who said that decreasing rents requires more housing, not rent control. She said, "That [building] is slow and expensive. In the meantime, the only policy step that will address the severe displacement crisis in the short term is the expansion of reasonable rent control.”
The state legislature had also looked at rent control in 2018. Rep. Richard Bloom (D-50) introduced a bill to repeal Costa-Hawkins. The Assembly Housing and Community Development Committee rejected the bill because the committee's two Republicans voted against passage and two Democrats abstained from voting. Three Democrats voted to recommend the bill, but four votes were required. Rep. David Chiu (D-17), the committee's chairman, said, "... this will not be the end of the conversation. It’s just the beginning.”
“Expands Local Governments’ Authority to Enact Rent Control on Residential Property. Initiative Statute.”
Text of the measure
The official ballot summary is as follows:
- Repeals state law that currently restricts the scope of rent-control policies that cities and other local jurisdictions may impose.
- Allows policies that would limit the rental rates that residential-property owners may charge for new tenants, new construction, and single-family homes.
- In accordance with California law, provides that rent-control policies may not violate landlords’ right to a fair financial return on their rental property.