The people of a city known for its middle-of-the-road politics and as the home of “Peanuts” cartoon strip creator Charles M. Schulz have jumped out front in the debate over whether rent control will alleviate or aggravate California’s growing housing affordability crisis.
Rent control is firmly established in liberal bastions like Berkeley, San Francisco, and Santa Monica, but it’s a new idea in the city of Santa Rosa. A June vote on whether to endorse or block the city council’s decision to impose rent control will either open the door to a new surge in rent control ordinances or make other cities and state legislators think twice about going further down the road of regulation.
If the rent control ordinance is endorsed after all the debate taking place, including a concerted effort by apartment owners to overturn the law, it would give the “all clear” signal to mayors and city council members looking for an easy way to assuage constituents who are angry about fast-rising rents.
It could also encourage the movement for repeal of statewide legislation that prevents cities from enacting much more drastic rent control laws on far more units of rental housing.
California cities have only limited powers to impose rent control, thanks to a law known as the Costa-Hawkins Rental Housing Act. This law prevents localities from controlling rents on any apartments built after 1995. It also requires that landlords be allowed to increase rents when a unit becomes vacant (vacancy decontrol).
Assemblymember Richard Bloom (D-Santa Monica) introduced the bill (AB 1506
The stage for the June vote in Santa Rosa was set last August, when council voted 4-2 to impose a 3% per year cap on rent hikes. Opponents circulated petitions and got enough signatures to force the voters to decide the fate of the law this June.
Meanwhile, other cities took the matter straight to the ballot box. In November, Berkeley and Oakland voted to expand and toughen existing rent control laws. Mountain View and Richmond passed their first controls. Citizens in Burlingame and San Mateo voted down rent control measures. The people of San Mateo also approved an extension of a sales tax add-on for infrastructure and affordable housing.
The resurgent interest in rent control is not surprising given the painfully steep increases in rents occurring in California, especially metro areas affected by high-tech job growth.
But the Santa Rosa case shows the crisis is moving out from those urban centers, beyond the suburbs and into areas formerly known for reasonably priced housing. Santa Rosa is a town of 174,000 located 54 miles north of San Francisco. There is plenty of open land, and it has no mass transit link to the big city.
Politicians would have voters believe the problem stems from greedy owners. But anyone who tries to build in California knows that increasing the supply of affordable housing, especially that which is income-targeted, is a very unpopular idea in most localities. Even the nice people in Santa Rosa make development of such housing a brutally expensive endurance contest for any developer crazy enough to try it.
Proponents of rent control often acknowledge that it should be part of a range of steps needed to increase the supply of housing, the surest way to reduce upward pressure on rents. Then they go ahead and vote in rent control by itself. They say that a broader set of solutions will come later. But it never does, and no one actually expects it to. Controlling prices is never matched by equally dramatic steps to increase supply.
The vast majority of local governments never seriously discuss ways to increase supply because they know their more affluent voters don’t want that to happen.
State law requires every locality in California to create a “housing element” as part of their general plan. These plans identify sites that are “suitable” for affordable housing. But they are more like science fiction stories than plans meant to be implemented. They are great at detailing the problem of unaffordable housing, but their lists of potential sites for affordable units are laughably unrealistic.
What’s even more galling to apartment owners is that the same city officials who think it’s okay to limit property owners’ revenue would never part with a dime of the revenues their cities generate from fees on housing repair and construction (and increase regularly). They never think about controlling the cost they directly add to rents via excessive regulation and restrictive zoning.
A victory for rent control in Santa Rosa would encourage politicians to take the easy route of capping rents instead of doing the hard work of increasing the supply of affordable housing and reducing government-imposed costs.
That’s a potential benefit for the small number of tenants who will benefit (regardless of their income by the way). But it’s a disaster for the larger numbers of low- and moderate-income folks who simply won’t find housing at any price anywhere near their jobs due to the lack of real action on housing.
It’s not too late for politicians, and the voters who keep them in office, to get serious about housing and how to make it more affordable. We can only hope that more voters follow the example of San Mateo’s citizens and reject facile solutions while taking fiscal responsibility to provide real ones.