海角大神

Rent control on ballot as California seeks a fix for housing costs

The startling dimensions of California鈥檚 housing crisis take shape through numbers. More than 134,000 people lack permanent shelter, accounting for a quarter of the country鈥檚 homeless population. Some 3 million tenants 鈥� more than half the statewide total 鈥� meet the federal definition of 鈥渞ent-burdened,鈥� spending at least a third of their income on housing. The state needs to add an estimated 3.5 million new housing units by 2025 to satisfy demand as the population grows.

The problem appears obvious. The proposed solutions, on the other hand, elicit conflicting opinions as reflected by the expensive fight over a ballot measure to remove restrictions on rent control that California voters will decide Nov. 6.

Proposition 10 would grant cities authority to create stronger rent stabilization policies than the state has permitted since lawmakers passed the Costa-Hawkins Rental Housing Act in 1995. Named for its legislative authors, the prohibits cities from capping rents on properties built since early that year and gives landlords a free hand to boost rents after tenants vacate units. The law also exempts condominiums and single-family homes from rent control rules.

The tussle over , which would repeal Costa-Hawkins, has drawn $80 million in campaign and inflamed debate over the potential impact of rent control on the state鈥檚 housing shortage. Supporters contend the measure鈥檚 passage would curb soaring rents and provide low-income tenants with greater stability. Opponents claim that abolishing Costa-Hawkins would deter new construction, and they call instead for easing building regulations to speed housing projects along.

Tenant and affordable housing advocates agree in principle for the need to accelerate construction. But they emphasize that, given the gulf between the ever-deepening for housing and the available supply, rent control can deliver immediate relief for tenants struggling to survive.

鈥淭hese are the people who are a lost job or eviction notice away from winding up on the streets,鈥� says Zev Yaroslavsky, a senior fellow at the Luskin School of Public Affairs at the University of California, Los Angeles. He led a recent that suggests Costa-Hawkins has contributed to Los Angeles County鈥檚 housing crisis. 鈥淲hat do we do about people with a bull鈥檚-eye on their back right now?鈥�

Yet as election day looms, public support for Prop. 10 remains tepid. A last month showed 36 percent of voters favor the measure while 48 percent oppose it. Perhaps more revealing, the survey by the Public Policy Institute of California found that a majority of renters would vote against the initiative.

The campaign opposing Prop. 10 has amassed $62 million in contributions and assailed rent control in TV ads as an ill-advised proposal that will widen the housing gap and inflate rents. Stephen Barton, co-author of a from the University of California, Berkeley that details the merits of rent control, asserts that the simplified message and a general unfamiliarity with rent stabilization have tipped public opinion.

鈥淚f you listen to a discussion on rent control, you鈥檒l hear people say, 鈥榃ell, it has defects,鈥� 鈥� says Mr. Barton, a former housing director for the city of Berkeley. 鈥淎nd then they鈥檒l talk about how a well-functioning housing market can fix everything. But we don鈥檛 have a well-functioning housing market, and rent control is one of the tools that can help address the problems.鈥�

The L.A. experience

Elizabeth Rivera lost her apartment in Los Angeles this summer when the landlord announced plans to demolish the eight-unit building. A few weeks later, her daughter, who has two young sons, had to leave her apartment after the property manager decided to more than double her $700 monthly rent.

Ms. Rivera and her daughter moved in together, renting a one-bedroom unit in Koreatown for $1,300 a month. The cost consumes about 40 percent of their combined income from Rivera鈥檚 $800 monthly Social Security check and her daughter鈥檚 minimum-wage job.

鈥淚t鈥檚 so much stress,鈥� Rivera says. 鈥淲e have trouble sleeping because we wonder if we鈥檙e going to be kicked out into the streets.鈥�

A recent UCLA poll showed that more than a quarter of Los Angeles County鈥檚 10.1 million residents worried about losing their home in the previous year. The figure spiked to 41 percent among tenants in a county with a median monthly rent of $2,440 and where renters more than half the households.

The annual 鈥渜uality of life鈥� found that almost three-quarters of residents favor legislation that would protect tenants from steep rent hikes while still enabling landlords to raise rents at an equitable rate.

鈥淥ne of the things that鈥檚 wrong with Costa-Hawkins is that it鈥檚 a one-size-fits-all approach to rent stabilization statewide,鈥� says Mr. Yaroslavsky, who oversaw the survey. For the former Los Angeles city councilman and county supervisor, the Prop. 10 scrum echoes a similar fracas that occurred in the city 40 years ago.

At the time, a confluence of forces 鈥� high inflation and a surge in property taxes, rental rates, and housing values 鈥� persuaded officials to enact rent control over the protests of landlords and developers.

Rulings by the US Supreme Court and California courts the rights of landlords to receive a 鈥渇air return鈥� on rent-regulated properties. The city鈥檚 ordinance, passed in 1978, allows annual rent increases between 3 percent and 8 percent. Los Angeles officials deemed that range adequate to help property owners cover rising costs and prevent them from pricing tenants out of their homes.

But Costa-Hawkins has curtailed the city鈥檚 efforts to rein in rents. In addition to barring local officials from crafting new rent stabilization policies, the state law froze in place any such rules that cities already had established.

The restriction precludes Los Angeles 鈥� one of 15 cities in California with rent control 鈥� from enforcing rent control on properties built after 1978. Meanwhile, construction of below-market housing has ebbed. Those parallel trends, coupled with a drop in state and federal housing subsidies, have fueled gentrification and created an affordable housing of nearly 570,000 units across the county.

鈥淭he state doesn鈥檛 do anything for renters. It does everything for property owners and developers,鈥� Yaroslavsky says. 鈥淚f we keep this up for another generation, we鈥檙e going to have far more homelessness that we do now.鈥�

Buffer for tenants

Construction and apartment industry groups top the list of Prop. 10 critics, who insist that loosening tax, environmental, and zoning regulations on new projects offers the best long-term answer to the housing crisis. Denton Kelley, a partner with LDK Ventures, a real estate developer in Sacramento, explains that the stubborn math of construction makes builders leery of rent control.

鈥淚f my costs keep going up on the development side but I can鈥檛 charge more for rent, I鈥檓 out of business,鈥� he says, adding that the state should share the onus of alleviating the housing shortage.

鈥淭here鈥檚 no disagreement by anyone that there needs to be more housing and more affordable housing in California,鈥� Mr. Kelley says. 鈥淏ut to bring more income-restricted housing to market, there needs to be a significant public source of funding to help cover the costs.鈥�

An estimated 1.5 million tenants spend more than half their income on rent in California. The National Low Income Housing Coalition that renters in California earn an average of $1,118 a month; the market rate for a one-bedroom apartment averages $1,355 a month.

A state report last year estimated that California stands to lose another 31,000 apartments to market-rate conversions by 2021. Barton, the former Berkeley housing director, contends that rent control policies allow cities to counter the pervasive of residents to any type of new housing.

鈥淓ven market-rate apartment projects get attacked,鈥� he says. 鈥淚n most communities, you鈥檙e not going to overcome the attitude of exclusion to build enough new housing. So you have to come up with another way to help lower-income tenants.鈥�

In the analysis of Manuel Pastor, a sociology professor at the University of Southern California, Prop. 10 would create a buffer for tenants against unemployment, illness, and other sudden misfortune. He co-authored a published this month that found rent control enhances the odds of low-income renters remaining in their homes and, in turn, improves their financial security and overall health.

鈥淩ent control isn鈥檛 the end-all, be-all solution,鈥� says Mr. Pastor, director of USC鈥檚 Program for Environmental and Regional Equity. 鈥淏ut it鈥檚 an important tool for helping cities take the action that suits them and protecting tenants who might be vulnerable.鈥�

The redevelopment void

The pace of housing construction in California plunged a decade ago as the country descended into a recession. The state has built an average of 80,000 units a year since 2007, less than half the supply needed to meet demand through 2025.

City planners and housing researchers regard rent control as a safeguard from rent-gouging and unjust evictions for low-income tenants, and the notion that it construction. In contrast, claim rent stabilization harms renters by shrinking the housing supply.

Foes of Prop. 10 cite on rent control in San Francisco and elsewhere to bolster their case. They predict that the initiative would hamper the ability of developers to attract financing for new projects, by squeezing profit margins. They also assert it would prompt landlords to repurpose rental units into condos to maintain their rate of return. In a last month, Kenneth Rosen, a UC Berkeley economist, argued that 鈥渢he best model for the California housing market would be to reduce barriers to construction.鈥�

Yet the call for deregulation from the measure鈥檚 skeptics draws the disapproval of one of their own. Mike Madrid, a Republican political consultant and the founder of Grassroots Lab, a public affairs firm based in Sacramento, describes the push to lower environmental and other building requirements as misguided.

鈥淭his idea that if you only streamlined the regulatory process, everything would be hunky-dory 鈥� no,鈥� he says. 鈥淛ust letting the market do what the market will do won鈥檛 be enough to solve the problem.鈥�

Mr. Madrid favors reviving the state redevelopment program that Gov. Jerry Brown eliminated in 2011 as California confronted a massive budget deficit. The program funneled $5.5 billion a year to local agencies for low-income housing and other urban renewal projects. Although a uncovered examples of questionable spending, the funding aided affordable housing efforts statewide.

In Los Angeles County, the loss of that money and additional cuts to state and federal subsidies caused public funding for housing to by almost two-thirds 鈥� from $712 million to $255 million 鈥� between 2008 and 2016. San Diego County鈥檚 funding fell from $179 million to $55 million; Sacramento County鈥檚 from $68 million to $23 million.

鈥淲hen the autopsy of the housing crisis is written,鈥� Madrid says, 鈥渒illing the redevelopment agencies is going to be the No. 1 culprit.鈥�

Governor Brown鈥檚 probable successor, Gavin Newsom, the Democratic nominee for governor who holds a double-digit over Republican candidate John Cox, resurrecting the program. (Both oppose Prop. 10.) But even if that transpires, relief for renters could take years to arrive, and the measure鈥檚 advocates view rent control as a potential remedy in the interim.

Elsa Stevens and her husband live in an apartment complex without rent control for people age 55 and older in Richmond, Calif. They survive on Social Security and disability payments and estimate they spend 40 percent of their income on rent. Ms. Stevens has volunteered for a phone bank to help the Prop. 10 campaign out of concern for fellow renters on fixed incomes.

鈥淲ithout rent control, it鈥檚 a free-for-all for landlords,鈥� she says. 鈥淚f they can charge someone two or three times what they鈥檙e getting from you, they鈥檙e going to push you out. It鈥檚 scary for renters in California.鈥�