"Knowledge will forever govern ignorance," instructed James Madison, one of our nation's founders, "and a People who mean to be their own Governors must arm themselves with the power that knowledge gives."

That maxim is especially apropos today when it comes to California's Initiative and Referendum process, adopted in 1911 to afford the People of California the right to exercise direct democracy. Unfortunately, democracy is undermined when the Initiative and Referendum process is used as a tool by corporate interests to manipulate and bamboozle voters.

Wealthy institutional landlords, operating as the California Apartment Association, have spent some $56 million to flood the airwaves with misleading No on 33 Ads, aspiring to block a measure that would allow municipalities across the state to institute rent controls. If adopted, Prop 33 would simply repeal the state's 1995 Costa-Hawkins Rental Housing Act signed into law by then Republican Gov. Pete Wilson. The nearly 30-year old Costa-Hawkins law prevents cities and counties from imposing rent controls on structures built on or after 1995. The statute also bars California counties and municipalities from imposing rent controls on single-family homes, even if those homes have been acquired by profiteering Wall Street investors.

Prop 33 does not directly impose rent controls, and it does not, as the landlords falsely claim in their well-funded campaign against the initiative, overturn "more than 100 housing laws" or eliminate "unjust eviction protections". Instead, if adopted by state voters this year, Prop 33 simply reinstates the right of cities and counties in the Golden State to enact rent-control measures that local governments possessed prior to passage of Costa-Hawkins.

Institutional landlords have not confined their assault on direct democracy to a deceptive ad campaign against Prop 33. They've also spent more than $35 million to advance what opponents of a separate measure, Prop 34, describe in the State Voters' Guide as a "Revenge Initiative." Prop 34 purports to make "permanent" a right that already exists: the right for MediCal, the state's version of Medicaid, to negotiate prescription drug prices. But the deceptive Prop 34 is carefully tailored by the same corporate interests opposing the rent control initiative to target and penalize just one single entity: the AIDS Healthcare Foundation, which has a history of backing rent control measures and is the principal supporter of Prop 33...

Prop 34 ostensibly mandates that healthcare providers, that meet specified criteria, spend 98% of their revenues from the federal discount drug program on patient care. "So far", according to LAist's voter guide, "only one group appears to match that description: The AIDS Healthcare Foundation, which operates HIV clinics and thrift stores across the country." If passed, the measure would prevent the non-profit organization from devoting a portion of the proceeds it receives from the federal discount drug program to fund ballot measures like Prop 33, which protect the economic interests of renters.

The Los Angeles Times opined that "revenge measures," like Prop. 34, are a "new low" that should have no place on the California ballot.

Setting aside the pettiness of that effort, from the perspective of the institutional landlords' bottom line, it's quite understandable why they'd proclaim, in opposition to Prop 33, that California has "the strongest rent stability law in the nation." Renters in the state, however, who "pay about 50% more for housing than renters in other states," according to the California Legislature's Nonpartisan Fiscal and Policy Advisor, may beg to differ.

More than 10 million people, 27% of the Golden State's population, reside in Los Angeles County. It's the most populous county in the nation. Prior to passage of Costa-Hawkins in 1995, the average rent for a 2-bedroom apartment in L.A. County was $853. In 2024, the average rent for the same sized apartment is now $2,544.

According to their recent synopsis of rent control studies, California YIMBY, an organization supporting equitable housing laws in the state, finds "tenants in rent-controlled units pay lower rents than they otherwise would have, while renters in uncontrolled dwellings pay higher rents and spend more time looking for housing."

While rent control provides "a financial disincentive to relocate in response to changing housing needs or job opportunities," regulating rent, the YIMBY report argues, "provides heightened stability of tenure, which reduces the likelihood of eviction." (Emphasis added.)

Where wealthy institutional landlords claim a "Yes on 33" vote would necessarily reduce construction of affordable housing, the synopsis counters:

As we recently reported in an article making the case that Democratic Presidential candidate Kamala Harris should ignore calls to shift her policies to the right:

The same wealthy investors who are bankrolling the "No on 33" campaign are the ones who are inflating prices by causing an artificial shortage of the number of single family homes available to purchase.

Carefully constructed local rent control ordinances that exempt application of rent control to newly constructed dwellings for a specified number of years, along with federal government investments in new housing nationwide, would likely minimize any adverse rent control impacts on the constructions of new apartments.

Of course, there is one downside to lowering the cost of housing so as to place the American Dream of home ownership within reach. There is a correlation between the reduction of housing costs with a reduction in property taxes that flow from institutional landlords to state and local government. The state's nonpartisan Legislative Analyst's Office estimates the passage of Prop 33 could potentially lead to a loss in local government revenue that "could range from a few million dollars to tens of millions of dollars annually." Of course, for new home buyers, the lower amounts they pay to purchase a home also means a lower amount they will owe in property taxes; a crucial factor in affordability.

There are additional issues.

At present there are 186,000 homeless Californians, many living on the streets. A recent Study, jointly performed by USC, UCLA and UC Berkeley, found that rent controls could help shield people, particularly seniors, from losing their homes.

Aside from the economics, there's also an issue of small "d" democracy. Statutes like Costa-Hawkins strip away the right of democratically elected city and county leaders to determine whether rent controls would be in the best interests of their local communities. If adopted, Prop 33 would reinstate control of rental costs to local communities.

Recommendations:

The California Democratic Party is recommending a "Yes" vote on Prop 33 and "No" on Prop 34, as is the Green Party of California.

The California GOP, however, is opposed to Prop 33 and supports Prop 34. The Libertarian Party of California joins the Republicans in opposing the rent control initiative in Prop 33, but currently offers no opinion on Prop 34.

                 

Article Categories: California, Rights And Freedoms, Kamala Harris, Wall Street, Election 2024, Rent Control