California November 2018 Ballot - Proposition 10
Proposition 10 would repeal a CA law passed in 1995. The Costa-Hawkins Rental Housing Act limited the ability of cities to impose rent control in a number of ways. It precludes rent controls from being imposed on single-family houses and on condos. It also allows landlords to raise rents when a tenant whose rent is limited by rent control, vacates their rental unit. Prop 10 would repeal Costa-Hawkins.
Supporters of Prop 10 say it is necessary to allow local governments to deal with the issue of rent control. Opponents say it won't do what it says it will do. I think that the L.A. Times editorial supporting this proposition has the most accurate assessment of this issue in the first part of that piece's title.
Rent control isn't the answer to California's housing crisis, but it could help. Yes on Prop 10
Rent control is not the answer. It creates a disincentive for those who want to build new housing in the limitation on the Return On Investment (ROI) they will realize from their investment. A study of rent control in San Francisco by two professors at Stanford University's Graduate School of Business and a student pursuing a PhD in Economics at Stanford reveals some interesting data on rent control. If you don't want to read the 46 page study, you can read a summary of its findings here.
The fact that the average rent for a one-bedroom apartment in San Francisco have risen by 50% since 2011 illustrates the impact of rent control. The savings of $2.9 billion between 1994 and 2010 that those living in rent-controlled apartments in SF is enormous. It is also offset by the $2.9 billion that renters who paid market-rate rents during the same period paid in higher costs to rent. Like Prop 13 does for homeowners, rent control provides benefits to those who have been around long enough to benefit, paid for by those who weren't here at the right moment.
In 1988 I was living in a three-bedroom apartment in Santa Monica and the rent was $652 per month. Adjusted for inflation, that would be $1,423 in September of 2018. I just did a search for three bedroom apartments in Santa Monica and the least expensive available unit I located goes for $3,800 per month.
The owner of the building in which I lived refused to spend the money (probably six figures) needed to re-do the plumbing to prevent flooding in one of the two bathrooms. As a result, the Rent Control Board reduced our rent from $652 to $411 per month until he made the repairs. Because he wouldn't make repairs to the electrical system, the rent was temporarily reduced to $190 per month. He fixed the electrical problems but the plumbing issues were still present when I moved out.
Do we want to force property owners to provide "affordable" housing to tenants when it means their ROI might be next to nothing? What is a fair rate of return?
Like it or not, this is a problem of supply and demand. The incredible demand for rental housing in California, worsened by the inability of most people to afford to purchase a home, has driven up the prices astronomically. We need to encourage, not discourage more construction.
I am voting No on Proposition 10.
Supporters of Prop 10 say it is necessary to allow local governments to deal with the issue of rent control. Opponents say it won't do what it says it will do. I think that the L.A. Times editorial supporting this proposition has the most accurate assessment of this issue in the first part of that piece's title.
Rent control isn't the answer to California's housing crisis, but it could help. Yes on Prop 10
Rent control is not the answer. It creates a disincentive for those who want to build new housing in the limitation on the Return On Investment (ROI) they will realize from their investment. A study of rent control in San Francisco by two professors at Stanford University's Graduate School of Business and a student pursuing a PhD in Economics at Stanford reveals some interesting data on rent control. If you don't want to read the 46 page study, you can read a summary of its findings here.
The fact that the average rent for a one-bedroom apartment in San Francisco have risen by 50% since 2011 illustrates the impact of rent control. The savings of $2.9 billion between 1994 and 2010 that those living in rent-controlled apartments in SF is enormous. It is also offset by the $2.9 billion that renters who paid market-rate rents during the same period paid in higher costs to rent. Like Prop 13 does for homeowners, rent control provides benefits to those who have been around long enough to benefit, paid for by those who weren't here at the right moment.
In 1988 I was living in a three-bedroom apartment in Santa Monica and the rent was $652 per month. Adjusted for inflation, that would be $1,423 in September of 2018. I just did a search for three bedroom apartments in Santa Monica and the least expensive available unit I located goes for $3,800 per month.
The owner of the building in which I lived refused to spend the money (probably six figures) needed to re-do the plumbing to prevent flooding in one of the two bathrooms. As a result, the Rent Control Board reduced our rent from $652 to $411 per month until he made the repairs. Because he wouldn't make repairs to the electrical system, the rent was temporarily reduced to $190 per month. He fixed the electrical problems but the plumbing issues were still present when I moved out.
Do we want to force property owners to provide "affordable" housing to tenants when it means their ROI might be next to nothing? What is a fair rate of return?
Like it or not, this is a problem of supply and demand. The incredible demand for rental housing in California, worsened by the inability of most people to afford to purchase a home, has driven up the prices astronomically. We need to encourage, not discourage more construction.
I am voting No on Proposition 10.
posted by me at 8:12 AM
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