Rent Control on California's Upcoming Ballot

May 5th, 2008 by Matt DiChiara| Posted in Political Corner | No Comments »

On the next statewide California ballot, the June 3^rd legislative primaries, Propositions 98 and 99 will be battling to set new regulations on eminent domain. Since the landmark eminent domain case, Kelo v. the City of New London was decided by the Supreme Court in 2005, states have rushed to clarify the circumstances under which the government may condemn and seize private property for public use.

Although eminent domain is an important issue to all property owners, one of the proposed initiatives, Proposition 98, is of especial interest to apartment owners and renters as it includes language that would phase out rent control in California.

Currently, in California there are 12 cities that have rent control ordinances. West Hollywood, Santa Monica, Berkeley, East Palo Alto and Cotati have ‘strong rent-control laws,’ which establish permanently regulated rent control regardless of the turnover of tenants. This is different from San Francisco’s rent stabilization, which sets caps on increases once a tenant has moved in.

Rent control is a contentious issue. Cities whose populations are comprised mainly of renters cite the need to maintain a stable rental market and protect low income families from tumultuous rental markets. The economy as a whole would be vulnerable if renters from each demographic were not able to contribute to a locality.

Arguments against rent control maintain that regulations are counterproductive to their own goals and end up creating housing shortages and reducing quality. When rents are artificially low for long term tenants, landlords must charge inflated prices for newly vacated apartments to make up for lost revenue from rent controlled apartments.

Another adverse effect of rent control is that nullifies one of the main advantages of renting, mobility. The Section 8 Housing Program, which grants housing vouchers, is commonly referred to as being a widely effective affordable housing program. Cities that impose rent control may in fact be making it more difficult for tenants to find affordable apartments for rent.

The Public Policy Institute of California polled likely voters and found that 53 percent believe rent control is a good thing and 39 percent think it is bad.

How do you feel about rent control? Have you benefited from rent control policies?