In November, California residents will vote on Prop 10, a ballot proposal to repeal the Costa-Hawkins Rental Housing Act.
As it stands, there is data proving that many renters living in rent-controlled units, have a higher median income than those who rent at fair market value (2015 Economist) as David Crown pointed out in this article on Prop 10 in Forbes.
This means that landlords will be limited their profits, losing money. In fact, it could make a big problem, the availability of affordable housing, a lot worse than it currently is.
“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.””