New California rent control initiative allows homeowner exemptions, affects fewer units

Rent control could be back on the ballot again come November 2020.

The “Rental Affordability Act” was cleared on Tuesday by the California Department of Justice and the Secretary of State’s Office to start collecting signatures, the necessary step to qualify a proposal for a vote.

The effort is a revived rent control initiative sponsored by Michael Weinstein, the president and CEO of the AIDS Healthcare Foundation, who last year poured more than $20 million into a campaign to pass Proposition 10. Voters rejected that measure in the November 2018 election, but the failure didn’t curb Weinstein’s ambition to amend rent control laws.

The updated initiative would chip away at rather than overhaul the Costa Hawkins Rental Housing Act by allowing local governments to impose rent control on properties older than 15 years. Current law restricts cities from imposing increased caps on units built after February 1995.

“The one lesson we learned from Proposition 10 is that the voters were not interested in a wholesale repeal of Costa Hawkins,” said Rand Martin, the foundation’s lobbyist. “But the other message we got in polling and focus groups is that people believe there are excesses to Costa Hawkins and there needs to be reforms.”

The act also exempts Californians who own up to two homes, a provision Martin said was included for homeowners who may rent a small handful of units.

The Legislative Analyst’s Office estimated that the initiative could carry an annual state and local revenue loss in the tens of millions of dollars.

Realtor groups that lobbied against Assembly Bill 1482 — a bill to cap rent increases at 7 percent plus inflation — also stand in opposition to Weinstein’s latest endeavor. The legislation narrowly passed the Assembly floor at the end of May after its authors accepted last-minute amendments to relax the bill’s language.

“The proposition is Weinstein’s latest attempt to return extreme forms of rent control to California through the statewide initiative process,” said Tom Bannon, CEO of the California Apartment Association. “Prop 10 2.0 would drive down property values and prompt an exodus from the rental housing market. California needs sensible housing policies that protect tenants and encourage the building of affordable homes for working families. This measure makes the crisis worse.”

But Martin said Weinstein’s team is prepared to “spend whatever they need to spend, within reason” to get the proposal on the ballot.

“They’re not going to shortchange the initiative,” he added.

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Hannah Wiley joined The Bee as a legislative reporter in 2019. She produces the morning newsletter for Capitol Alert and previously reported on immigration, education and criminal justice. She’s a Chicago-area native and a graduate of Saint Louis University and Northwestern.