Prop 10 2.0 would likely drive rentals from market, lower values, says LAO
A statewide rent control measure targeted for 2020 would likely drive rental units from the market, decrease apartment property values, and possibly diminish annual tax revenues by tens of millions of dollars or more.
Those were some of the predictions this week from California’s Legislative Analyst’s Office. The nonpartisan fiscal and policy adviser published an analysis Monday of the potential impacts of Michael Weinstein’s Rental Affordability Act, or as some are calling it, Proposition 10 2.0.
The proposition is Weinstein’s latest attempt to return extreme forms of rent control to California through the statewide initiative process. Weinstein’s previous bid for radical rent control — Proposition 10 — failed miserably at the polls this past November.
The proposed statewide ballot measure would allow cities and counties to impose rent control on buildings after they turn 15 years old. Under the Costa-Hawkins Rental Housing Act, local jurisdictions may not impose rent control on units built after 1995.
Weinstein’s measure would also once again allow local governments to apply vacancy controls, meaning rents would remain regulated in rent-controlled jurisdictions even after changes in tenancy.
The analysis clearly points to a reduction of available homes as stricter rent control leads property owners to take units off the market, said Tom Bannon, chief executive officer of the California Apartment Association.
“Prop 10 2.0 would drive down property values and prompt an exodus from the rental housing market,” Bannon said in this news release. “California needs sensible housing policies that protect tenants and encourage the building of affordable homes for working families. This measure makes the crisis worse.”