It makes a bad problem worse
This fall, California voters will vote on Proposition 10, a measure that would open the door to radical rent control and make California’s current housing crisis even worse. California newspapers statewide agree with the California Chamber of Commerce and are urging all Californians to vote No on Proposition 10.
Specifically, Proposition 10 proposes to repeal the Costa-Hawkins Rental Housing Act of 1995, a bipartisan bill that placed limits on locally enacted rent control laws. Proposition 10 opens the door to radical rent control, and would further distort California’s already broken housing market.
CalChamber Reasons for Position
Reasons every business should Vote NO on Proposition 10:
- California has a critical shortage of housing – Proposition 10 will make it worse by making it harder to build new affordable housing, driving landlords to take existing rentals off the market and putting more pressure on California’s broken housing market.
- Businesses need a place for new workers to live – Businesses across the state are having an increasingly difficult time finding places for workers to live. California’s high housing costs and limited supply put California businesses at a competitive disadvantage when trying to hire workers.
- Businesses will be asked to pay for higher housing costs – As California’s housing market spirals out of control, businesses are being forced to increase employee wages to cover the cost of basic housing. Proposition 10 will drive up housing costs even further, putting more pressure on businesses to increase compensation to their employees, and driving up the cost of doing business in California.
- Proposition 10 could lead to new taxes – The Legislative Analyst’s Office (LAO) has warned Proposition 10 is likely to cost California state and local governments hundreds of millions of dollars in lost tax revenues. That will increase the pressure on future lawmakers to fill the gap with new taxes.
- Price controls simply don’t work long-term. Rent control has contributed to price increases in some of the most expensive housing markets in the state including San Francisco, Santa Monica and Beverly Hills. If Proposition 10 passes, housing will be harder to find for low-income applicants. Liberal and conservative economists alike have warned rent control leads to a reduction in housing supply, leading to more rental housing being taken off the market and further exacerbating our current affordable housing shortage
We cannot regulate our way out of this crisis. California’s current housing crunch is a matter of simple supply and demand. We must take steps that make it easier to build the affordable and market-rate housing we need to address our current crisis. Proposition 10 provides the wrong incentives, and will exacerbate many of the problems proponents say they are trying to solve. Owners of rental property will convert to condos, removing rentals from the market and intensifying shortages.
Following are excerpts from newspaper editorials opposing Proposition 10.
Ventura County Star: Vote no on Prop. 10 and rent control. “The main reason for California’s affordable housing shortage is simple: too much demand and not enough supply. Prop. 10 does nothing to address that disparity and indeed could make it worse.” October 6, 2018
The Fresno Bee, The Modesto Bee: When it comes to rental costs, Proposition 10 is not the answer. It deserves a no vote. “Our recommendation: Let market forces take care of rental pricing. Vote no on Proposition 10.” October 1, 2018
Bakersfield Californian: We recommend: Fix our roads, deliver clean, abundant water. “Voters should reject Proposition 10, which is being falsely presented as an easy way to combat increasing rents and to increase affordable housing. The answer to California’s housing crisis is to build more affordable housing, not to discourage construction.” September 30, 2018
San Francisco Business Journal: No on Prop. 10 — More rent control really means less housing. “Prop. 10, on November’s ballot, is intended to usher in a new era of rent control across California. But Prop. 10 addresses none of rent control’s underlying flaws; indeed, it adds complications of its own.” September 27, 2018
San Diego Union-Tribune: Proposition 10: Vote no on rent control, a ‘solution’ that worsens housing crisis. “… adding considerable new housing is ultimately the most constructive, enduring way California can address its housing crisis. It’s the only way. Vote no on Proposition 10.” September 13, 2018
San Francisco Chronicle: Chronicle Recommends: No on Prop. 10. “But more rent control — and more local government control — will probably further suppress the supply of housing and deepen the crisis for the state. More housing is the way out of the housing shortage. Proposition 10 is not.” September 14, 2018
Los Angeles News Group: No on Proposition 10, the wrong fix for California’s housing crisis. “Proposition 10 is a fine example of chasing a disaster with a catastrophe. The disaster is the housing crisis in California. The escalation of home prices and rents has far outpaced wage growth, helping to give California the nation’s highest poverty rate when adjusted for the cost of living.” September 28, 2018
Mercury News & East Bay Times: Prop. 10 would exacerbate California’s housing crisis. “Rents in California, especially the Bay Area, are soaring. Decent housing is unaffordable for far too many. But the solution is to build more housing, not restrict rents. That’s why voters should reject Proposition 10 on the Nov. 6 ballot.” August 25, 2018
Press-Telegram: Rent control is no solution to our housing crisis. “The prospect that a city may enact rent control in the future is enough to chill investment in rental property and could blow up countless pending deals for new construction. Trying to fix a housing crisis with rent control is like sending an oil tanker to put out a forest fire.” June 1, 2018