by: Santa Cruz Sentinel Editorial Board
California voters will be asked this fall to expand rent control with a statewide ballot measure similar to ones they rejected in 2018 and 2020 by 19 and 20 points respectively.
The same controversial group, the AIDS Healthcare Foundation, apparently has money to burn and is back with a similar measure. Like previous ones, Proposition 33 would overturn the Costa-Hawkins Rental Housing Act.
Rent control doesn’t work because it distorts the market, reduces supply and obliterates property rights. The marketplace works for housing as it does for everything else – provided government doesn’t make a mess of it.
“Rent is high in California because the state does not have enough housing for everyone who wants to live here,” notes the state’s nonpartisan legislative analyst.
California already has statewide rent control that limits increases to 5 percent a year plus inflation (capped at 10 percent). But under the state’s Costa-Hawkins Act, local governments can only limit rents for multi-unit apartment buildings constructed before Feb. 1, 1995. And they must allow landlords of those older buildings to reset rents to market rates for new tenants.
Prop. 33 would free local governments to set rent rules without restrictions. Cities could expand price controls to all types of units, including those built after 1995, and limit how much landlords could increase rents for new tenants.
To address California’s housing crisis and hold down rents, the state needs to add supply by incentivizing more construction. But rent control discourages investment in new housing, constraining supply and driving up overall housing costs.
Prop. 33 is so broad that key Democratic housing advocates, including state Sen. Toni Atkins, the party’s former leader in the Senate, and Assemblymember Buffy Wicks, D-Oakland, oppose it. They fear the measure grants autonomy to cities that they could use to undermine recent state mandates for more housing.
Expanding rent control would only exacerbate the state’s housing crisis. Which is why voters should reject Proposition 33 on the Nov. 5 statewide ballot.
At the same time, voters should support Proposition 34, although this measure has been dubbed the “revenge of the landlords because it is bankrolled by the California Apartment Association and takes direct financial aim at Michael Weinstein’s troubling multibillion-dollar AIDS Healthcare Foundation, the primary funder of this year’s rent control measure and the last two. (Opponents say it’s questionable whether this measure is constitutional, but the state Supreme Court in July refused to block Prop. 34 from the ballot.)
Somewhat tellingly the League of Women Voters of California takes no position on propositions 33 and 34.
The AIDS Healthcare Foundation has spent more than $100 million on ballot measures, candidate campaigns and political committees in the past 20 years. The foundation has also bought apartment complexes, including more than a dozen in Los Angeles, according to a Los Angeles Times investigation. The newspaper found squalid conditions in the foundation’s buildings.
With Prop. 34, the apartment owners’ association seeks to cut off Weinstein’s political money supply, targeting the foundation’s reselling of medications, the primary source of its $2.5 billion in annual income. Prop. 34 would apply only to health care providers that meet two conditions: They have spent over $100 million in any 10-year period on anything other than direct patient care, and they have operated multifamily housing reported to have at least 500 high-severity health-and-safety violations.
For a provider meeting those two criteria, the ballot measure would revoke its health care license and tax-exempt status if it failed to spend 98% of its revenues from the federal discount prescription drug program on direct patient care.
Weinstein’s fundraising to support rent controls under the banner of AIDS health care is deliberately misleading and needs to end. Vote Yes on Prop. 34.