Proposition 10 is bad for landlords and renters
by Amy Cimetta
Proposition 10 is the latest chapter in the housing affordability crisis. Many perceive it as a David and Goliath showdown where Goliath charges David an exorbitant rent for a rundown, one bedroom apartment with a leaky faucet, street parking, and no pets. The cries for rent control to end the madness are deafening: We need to make housing affordable.
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Proposition 10, which effectively increases each city’s ability to restrict residential property owners’ use of rental units, is not the solution.
If Prop 10 is approved, it will repeal the Costa-Hawkins Rental Housing Act, which was enacted in 1995 to stop the downward spiral in which rent control cities found themselves. In cities such as Santa Monica, rent control made it no longer economical for landlords to maintain their rental properties. In many cases, they pulled rental units off the market. Vacant properties became rundown or were converted to condominiums. Instead of an increased number of affordable housing units, Santa Monica lost thousands of rental units. Although rent control may benefit tenants in the short run, many economists have come to the conclusion that rent control ultimately reduces rental inventory.
Only when Costa-Hawkins came into play were rent control cities able to recover from the decimating effects of unabashed rent control.
The Beach Cities don’t have rent control. So if Prop 10 is approved, it does not impact us immediately. But if rent control ever comes to the Beach Cities, which is not unlikely due to our high percentage of renters – the protections provided by Costa-Hawkins would not exist. Landlords could not raise rents to market rates upon vacancies. They could not raise rents to cover their expenses. Rent control could deter landlords from maintaining their properties altogether, letting them fall into disrepair, and in many cases, leaving them unoccupied. This not only impacts the housing supply, but it impacts the community as a whole. Rundown rentals would contribute to the deterioration of the city and the reduction of property values.
There is no doubt that we need to find a solution for affordable housing. But we need to find a solution that is not a double-edged sword: that hurts everyone and does not solve the problem it was intended to fix. Let’s make a commitment to work towards an effective solution for the shortage of affordable housing. Everyone deserves a living wage; everyone deserves a roof over their head. Proposition 10 won’t help these causes.
Amy Cimetta is a Realtor with RE/MAX Estate Properties in Manhattan Beach.