California Proposition 21, Local Rent Control Initiative (2020)

California Proposition 21, the Local Rent Control Initiative, is on the ballot in California as an initiated state statute on November 3, 2020.

“yes” vote supports this ballot initiative to allow local governments to enact rent control on housing that was first occupied over 15 years ago, with an exception for landlords who own no more than two homes with distinct titles or subdivided interests.
“no” vote opposes this ballot initiative, thereby continuing to prohibit rent control on housing that was first occupied after February 1, 1995, and housing units with distinct titles, such as single-family homes.

Overview

What would the ballot measure change about rent control in California?

The ballot measure would replace the Costa-Hawkins Rental Housing Act (Costa-Hawkins), which was passed in 1995. 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. Costa-Hawkins continued to allow local governments to use rent control, except on (a) housing that was first occupied after February 1, 1995, and (b) housing units with distinct titles, such as condos, townhouses, and single-family homes.[1]

The ballot measure would allow local governments to adopt rent control on housing units, except on (a) housing that was first occupied within the last 15 years and (b) units owned by natural persons who own no more than two housing units with separate titles, such as single-family homes, condos, and some duplexes, or subdivided interests, such as stock cooperatives and community apartment projects.[2]

Under Costa-Hawkins, landlords are allowed to increase rent prices to market rates when a tenant moves out (a policy known as vacancy decontrol).[1] The ballot measure would require local governments that adopt rent control to allow landlords to increase rental rates by 15 percent during the first three years following a vacancy.[2]

How does this ballot measure relate to California Proposition 10 (2018)?

See also: California Proposition 10 (2018)

In 2018, 59 percent of voters rejected Proposition 10, which would have allowed local governments to adopt rent control on any type of rental housing. The AIDS Healthcare Foundation (AHF) co-sponsored Proposition 10, and an AHF division called Housing Is A Human Right is sponsoring the campaign behind the 2020 ballot initiative.[3] Rand Martin, a lobbyist for AHF, said, “The one lesson we learned from Proposition 10 is that the voters were not interested in a wholesale repeal of Costa Hawkins. But the other message we got in polling and focus groups is that people believe there are excesses to Costa Hawkins and there needs to be reforms.”[4] Tom Bannon, CEO of the California Apartment Association, opposed Proposition 10 in 2018. He said, “Voters overwhelming rejected the measure the last time it was on the ballot. Once we educate voters about Weinstein’s latest housing-freeze measure, it’s bound to fail just as miserably as Prop. 10.”[5]

Text of measure

Ballot title

The ballot title is as follows:[6]

Expands Local Governments’ Authority to Enact Rent Control on Residential Property. Initiative Statute.[7]

Ballot summary

The ballot summary is as follows:[6]

  • Amends state law to allow local governments to establish rent control on residential properties over 15 years old. Allows local limits on annual rent increases to differ from current statewide limit.
  • Allows rent increases in rent-controlled properties of up to 15 percent over three years at start of new tenancy (above any increase allowed by local ordinance).
  • Exempts individuals who own no more than two homes from new rent-control policies.
  • In accordance with California law, prohibits rent control from violating landlords’ right to fair financial return.[7]

Fiscal impact statement

The fiscal impact statement is as follows:[6]

Overall, a potential reduction in state and local revenues in the high tens of millions of dollars per year over time. Depending on actions by local communities, revenue losses could be less or more.[7]

Full text

The full text of the ballot initiative is below:[2]

Support

Renters and Homeowners United to Keep Families in Their Homes, also known as Yes on 21, is leading the campaign in support of the ballot initiative. The campaign is sponsored by the AIDS Healthcare Foundation. Proponents named the initiative the Rental Affordability Act.[8]

Supporters

 

Officials

Political Parties

Individuals

  • Dolores Huerta – Co-Founder of the United Farm Workers [Source]

Unions

Organizations

  • ACLU of Southern California [Source]
  • Democratic Socialists of America, Los Angeles [Source]
  • Eviction Defense Network [Source]
  • Los Angeles Tenants Union [Source]
  • National Lawyers Guild, Los Angeles [Source]

Arguments

 

  • Michael Weinstein, president of the AIDS Healthcare Foundation: “Among the 17 million renters in California, the suffering is unabated. Not only do we see increased homelessness, but the affordability crisis has reached epic proportions with many people paying 50 percent or more of their income to keep a roof over their head.” [Source]
  • U.S. Sen. Bernie Sanders (I-Vermont): “This initiative will allow California cities to pass sensible limits on rent increases and protect families, seniors and veterans from skyrocketing rents. I was born and raised in a three-and-a-half room rent-controlled apartment in Brooklyn, New York. That most minimal form of economic security was crucial for our family, but today that type of economic security does not exist for millions of Americans. That has got to change.” [Source]
  • David Huerta, president of the SEIU United Service Workers West: “Profound housing insecurity in our state is one significant reason the COVID-19 pandemic has resulted in such disproportionate suffering and tragedy for workers in low-wage jobs, workers of color and immigrant workers. Because of systematic exclusion and racism, these families lived in crowded conditions or the constant fear of eviction even before this pandemic; now their living conditions are truly a matter of life and death.” [Source]

Opposition

Californians for Responsible Housing, also known as No on Prop 21, is leading the campaign in opposition to the ballot initiative.[9]

Opponents

Californians for Responsible Housing provided a list of opponents, which is available here.

 

Unions

  • California Conference of Carpenters [Source]
  • California District of Iron Workers [Source]
  • California State Association of Electrical Workers [Source]
  • California State Pipe Trades Council [Source]
  • State Building and Construction Trades Council of California [Source]

Corporations

  • Avalonbay Communities, Inc. [Source]
  • Equity Residential [Source]
  • Essex Property Trust, Inc. [Source]
  • Prometheus Real Estate Group, Inc. [Source]

Organizations

  • AMVETS, Department of California [Source]
  • American Legion, Department of California [Source]
  • California Asian Pacific Chamber of Commerce [Source]
  • California Chamber of Commerce [Source]
  • California Council for Affordable Housing [Source]
  • California NAACP State Conference [Source]
  • California Seniors Advocates League [Source]
  • California Taxpayers Association [Source]
  • Congress of California Seniors [Source]

Arguments

 

  • Thomas Aiello, policy and government affairs manager for the National Taxpayers Union: “If approved, it will hurt renters by discouraging private sector builders from bringing more affordable housing units to market. The solution to lowering rental prices won’t come from more government mandates and rules, but instead from reasonable changes to strict zoning laws, high building costs, and lengthy permitting processes.” [Source]
  • Sid Lakireddy, president of the California Rental Housing Association: “It has been proven time and again that rent control does not work. Voters overwhelmingly rejected the 2018 rent control initiative and Michael Weinstein’s second attempt will also be rejected. We do not need more distractions and resources spent on failed policies but instead we need policies that encourage more affordable and accessible housing.” [Source]
  • Gary Passmore, president of the Congress of California Seniors: “Prop. 21 provides no protections for seniors and would hurt senior renters and homeowners alike. For those seniors relying on their single-family home for their retirement nest eggs or to help fund their care later in life, Prop. 21 pulls the rug out from under them. And for senior renters on fixed incomes, Prop 21 would result in less affordable rental housing options.” [Source]

Campaign finance

See also: Campaign finance requirements for California ballot measures
The campaign finance information on this page reflects the most recently scheduled reports processed by Ballotpedia, which covered through June 30, 2020. The deadline for the next scheduled reports is September 24, 2020.

 

The Homeowners and Tenants United PAC was registered to support the ballot initiative. The committee had raised $16.68 million, with 99.8 percent from the AIDS Healthcare Foundation.[10]

Three PACs, including Californians for Responsible Housing, were registered to oppose the ballot initiative. The committees had raised $16.25 million, including $4.70 million from Essex Property Trust, Inc.[10]

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