Main Content

Home » Blog » NO on Prop 10 – California Needs More Inventory, Not Rent Control Regulations

NO on Prop 10 – California Needs More Inventory, Not Rent Control Regulations

Proposition 10, the supposed “Affordable Housing Act” has been a hotly contested proposition set to go before voters on November 6th.

As Californians struggle to pay some of the highest rents in the nation (in part due to the Short Term Vacation Rentals industry), true affordable housing is vital to a healthy economy as California renters currently shell out more than 50% of their income in rent.

Proposition 10 is the repeal the Costa-Hawkins Rental Housing Act. In essence it opens the door for cities to implement rent stabilization and rent-control policies, over turning the act that was put in place over two decades ago.

What does overturning the Costa-Hawkins Act truly lead to? For one, Prop 10 could potentially reduce state and local revenue by “tens of millions of dollars in the long term.” according to legislative analysis and is due to projected losses in property taxes

In fact, Proposition 10 is set up to do the opposite of what it is intended to do.
If it passes, there is less motivation to build more “affordable housing”, because of the restrictions and regulations imposed on landlords. It will also lead to landlords no longer wanting to be landlords. Proposition 10 not only limits profits, in many cases, investment property owners will be taking bigger losses. The trickle down effect is from losses on rental properties is, less desire to build apartment buildings and condos. Which means less affordable housing.
So what is the answer? Is this the answer to lower the rentals costs?  No, the answer is to build more place for people to live. To raise the level of inventory which naturally brings down prices. More supply, less demand leads to lower prices and more opportunity for affordable housing.
Another way to add to the inventory to the market is by regulating and or banning short term vacation rentals which have created a housing crisis locally and globally, limiting availability for long term housing. Malibu is currently considering a outright ban on Short Term Rentals in an effort to restore our neighborhoods, which have been turned into hotel commercial zones.
If proposition 10 passes areas like Los Angeles and Santa Monica would be affected by the repeal almost immediately.
It’s no secret that Southern Californians are suffering from a housing crisis due to a multitude of reasons that local and state governments need to address. A No on Prop 10 gives landlords incentive to continue to invest in more rental properties, which is vital to growing the Southern California rental market.
Local governments should be focused on other ways to support more affordable housing, which include short term regulations or an outright ban to start. Keep the Costa-Hawkins Rental Act in place. If it ain’t broke, don’t fix it.