California gives rent control another chance on the 2020 ballot

In a state with notoriously high housing costs, voters will consider yet another new take on rent control. USC experts dissect the pros and cons of Proposition 21.

October 28, 2020 Ron Mackovich-Rodriguez

When California voters rejected a statewide expansion of rent control two years ago, the vote wasn’t close. A year later, rent control advanced when Gov. Gavin Newsom signed the Tenant Protection Act of 2019, placing limits on rent increases and preventing evictions in some lease termination cases.

Now, the issue is in the news for a third year with Proposition 21. It allows cities to cap rents, including those on vacant apartments and some privately owned, single-family units.

“I think we can decide when is it appropriate for it appropriate for rent control to be enacted in one’s community,” said Gary Painter, professor at the USC Price School of Public Policy and director of the Sol Price Center for Social Innovation. “We should be cautious about rent control stabilization measures as a tool for affordable housing, but we shouldn’t necessarily rule it out so we can support families who are low and moderate income to improve their housing stability.”

Under Proposition 21, newer apartment complexes could also fall under some form of rent control.

While supporters see a partial solution to California’s housing crisis, there are concerns that the policy could force property owners to simply convert rentals into condominiums. Others are worried that it could divide tenants into winners and losers.

California rent control: helping tenants, hurting builders?

“There’s a lottery aspect to this policy,” said Richard Green, director of the USC Lusk Center for Real Estate and a professor at USC Price and the USC Marshall School of Business. “It doesn’t depend on whether you need rental assistance or not. Rather, it’s ‘do you happen to be in a property that has rental assistance?’”

Green said he could support a different approach:

“I prefer a policy that better targets redistribution from those who can afford to pay to those who really need the help, but this is just another thing that makes it unattractive to build housing in California.”

In late August, the state took a step to protect tenants from eviction during the pandemic. The Tenant Relief Act prohibits evictions of tenants who are behind on rent because of a COVID-related issue through February 2021.

“Were it not for an eviction moratorium, we would already be witnessing an increase in homelessness like never before,” said Benjamin Henwood, assistant professor at the USC Suzanne Dworak-Peck School of Social Work. “Rent control alone can’t solve the problem of homelessness, but to stave off a worsening homelessness crisis, we need all possible tools.”