During the WeHo for the People candidate forum this past week, all the candidates were asked their position on Proposition 33. Seven candidates opted to answer YES on 33. I was the only NO on 33 among the candidates running for City Council.
Under current state law, the Costa-Hawkins Rental Housing Act limits local rent control in three main ways. First, rent control cannot apply to any single-family homes. Second, rent control cannot apply to any housing built on or after February 1, 1995. Third, rent control laws generally cannot tell landlords what they can charge a new renter when first moving in; instead, rent control can only limit how much landlords increase rent for existing renters.
Proposition 33 would eliminate the Costa-Hawkins Rental Housing Act and expand the right for local jurisdictions to apply rent control to all forms of housing. It could allow local governments, like the West Hollywood City Council, to apply rent control on condos or houses. It could put small mom-and-pop landlords out of business if they cannot raise the rent to market value when a tenant moves out from a rent-controlled apartment. For instance, a tenant next door to me is a long-term renter and pays $1,380 for a large two-bedroom apartment. The market price of that unit is more than twice that.
If a landlord cannot raise the rent to market value, there are both primary and secondary consequences. First, the landlord might not remodel an older unit if they cannot increase the rent. Second, owners of smaller buildings still face rising costs of property taxes, trash, water, and more—with no ability to offset those costs with increases after a tenant moves out—and may opt to sell the building.
Consider how that transaction would play out. The owner of the building sees no upside and opts to sell the building. At least one tenant will be forced to relocate (new owners are allowed to remove the last tenant to move in and occupy the unit). Or the building is sold and torn down for a larger project, and all the tenants lose their homes.
In West Hollywood, there are hundreds of these mom-and-pop buildings that have 2–4 units, housing thousands of residents. If rent control means a landlord can “never” raise the rent to market value after a long-term tenant vacates the property, these landlords will sell.
An independent analysis by the California Legislative Analyst’s Office also notes: “The effects of Proposition 33 would reduce the value of these rental properties, which would lead to a decrease in property taxes. The effects of the proposition would also increase the costs on local governments to carry out the new laws, which could range in the millions of dollars per jurisdiction.”
Every one of the candidates in this race has claimed they are for “small business” and for “renters.” But if your vote is YES on 33, say goodbye to the mom-and-pop landlords and those residents who live in those buildings too. Proposition 33, if applied to West Hollywood’s housing stock, is so dangerous to the diversity of our housing that sometimes I think it was invented by big corporations who want to force the little guy to sell. I’m afraid that I am the only candidate in this race who understands the consequences of Proposition 33. I’m NO on 33. Keep the mom-and-pop small business landlords alive. This proposition will just perpetuate the corporate takeover of our housing stock.
We need to have either a free market economy, or we need to choose Marxist rent control. We can’t mix both systems. I agree with prior posters that Larry is spot on correct here. We literally have some insane people running for city council.
Rent Control kept thousands of residents in place when we first adopted it. After a decade, the State passed Costa-Hawkins, which allowed for units to be “de-controlled” and go to market rate at the time a tenant vacated. While that clearly played a role in skyrocketing rent, it did provide an economic safety valve that allowed most landlords to stay in the rental business. Once a unit when to market, rent control limits on the unit went back into place, protecting the new tenant from random increases. So I believe WeHo’s current system works pretty well for most tenants in… Read more »
Yeah, Prop 33 is no good. NO ON 33.
You are 100% correct Larry, kudos on your courage and shame on the other WeHo candidates who claim to be for “small business” yet support Prop 33, which is a DIRECT ATTACK on small businesses, including mostly Mom & Pop housing providers who provide a valuable service (i.e. much needed housing!). Sadly, Prop 33 is deeply flawed and if passed will have the OPPOSITE effect it intends to fix i.e..a housing shortage, guaranteeing housing shortages for decades to come. No sane individual or small business owner will invest in RENTAL HOUSING to have it expropriated (stolen!) by the State of… Read more »
There would be some real benefit if we could extend rent control to building built after 1995 but where would you draw the line? This might discourage the building of new housing. The other issue is vacancy de-control. That means the unit goes to market upon vacancy. Vacancy decontrol has generally has given unethical landlords incentive to harass long term tenants to force them to move and has fueled skyrocketing rents. There are not too many “mom & pop” buildings left in West Hollywood and the repeal of vacancy decontrol could incentivize a wholesale destruction of older rental buildings which… Read more »
The passage of prop 33 would be devastating for housing production and housing affordability.
That is my concern. Given the age of many of our rent controlled buildings, the owners don’t need much encouragement to sell to developers. While new housing would happen, it is going to be luxury units with a handful of “affordable” units. But in the process a lot of our friends and neighbors may be displaced. Our current rent control protects a lot of people and the changes in Prop. 33, no matter how well meaning, may have negative impacts on WeHo’s residents.
Larry is correct in his assessment of Prop 33. We have an affordability crisis because we haven’t built enough housing. Cities like WeHo make the process so complicated, time consuming, and expensive with affordable housing inclusions that high rents drive new development. Even when developers come into WeHo with development applications fully complying with all Weho’a requirements – it still takes well over a year and up to three years to get the approval to build. This is part of why we do not have enough new housing built. The second part is we all fight every proposal that takes… Read more »
It also doesn’t really help the poor or even middle class find housing. Back before Costas-Hawkins if you wanted that rent controlled two bedroom you greased the palm of the owners. I know people who paid thousands “under the table” to get an apartment in Santa Monica.