District 3 Councilman Jose F. Moreno and Anaheim mayoral candidate Ashleigh Aitken are both supporting of Proposition 10, which would repeal the Costa-Hawkins Act – a 1995 state law that prohibits local governments from imposing rent control on newly constructed buildings, single-family homes and condominium units. It also allowed owners of already subject to rent control laws to increase the rent on a unit to market value a new tenant move in. It also prevents rent control laws in place in 1995 from being made more stringent.
If Proposition 10 is approved by the voters this November, cities like Anaheim would be free to enact price controls on how much rent property owners could charge – whether for an apartment building or private home. The end result would to increase the shortage of affordable housing.
At last week’s mayoral candidate forum at Katella High School, Aitken also endorsed Prop. 10:
“I support the repeal of Costa-Hawkins, because I fundamentally think that housing and housing development should be a local issue. I think that is is something that each municipality should look at what their needs are, and should be able to decide. That being said, I am not a fan of rent control. I think that the way we aggressively bring down the cost of living in this city – which is not an Anaheim issue, this is a statewide issue – is really, start looking at our affordable housing programs. In a city of our size, we do not have an affordable housing ordinance. We don’t have any consistent requirements for our developers to do set-asides for affordable housing. We don’t have a streamlined process for people that want to build affordable housing or to build grandma units in their backyard so that they can have more units in Anaheim. Right now I think it’s really an issue of we need to build more housing in Anaheim, and all that housing that is built – unlike what has been going on in the last decade – needs to have an affordable housing component under an ordinance.”
An interesting answer that begs the question: if one is not a fan of rent control, then why repeal Costa-Hawkins? Aitken also voices her strong support for inclusionary zoning – but inclusionary zoning and rent control are two sides of the same price controls coin. They both entail government artificially suppressing rental and sale prices for some at the expense of everyone else – who pay for it in the form of higher rents and mortgage payments for themselves. Zeal for inclusionary zoning casts doubt on discomfort with rent control.
Howard Jarvis Taxpayers Association President Jon Coupal described the initiative’s negative impacts in an op-ed in the OC Register:
Proposition 10 would allow cities to enact any type of new rent-control law. New bureaucracies could impose new rules, fees and price controls on old buildings, new buildings, small buildings, garage apartments, granny flats and even single-family homes and condos. Proposition 10 would make California’s well-documented housing crisis even worse by discouraging investment in rental housing and incentivizing conversions or even demolition of existing rental property.
What’s more, the initiative would unleash a massive new regulatory bureaucracy in control of all housing. Unelected rent boards would have the power to raise fees on housing without any caps, and no vote of the people or the local elected body is required.
Rent control is a deeply flawed policy. It forces property owners to subsidize tenants regardless of need. The property owner might be a retiree who’s barely getting by and the tenant might be a highly paid Google engineer. It’s just unfair for the government to require one person to subsidize the living expenses of another.
Rent control is unfair to renters because it artificially inflates the rental price of all other available rental units. It is simple supply and demand, new rental units are not developed because housing providers cannot long stay in business with a ceiling on revenue but not on costs. So there are fewer units in the market (supply), increasing demand for open units and making prices go up.
History shows that price control schemes like rent control are failures. Nonetheless, progressives love rent control – it translates their compassionate impulses into government coercion. As Moreno has made clear in his comments about a like form of government economic diktat – inclusionary zoning – he business won’t do what he considers the right thing unless government forces them.
There is a genuine shortage of affordable housing in California – and in large part due to misguided government policies. We all want to put housing within reach of more Californians, but increasing government interference in and control of the housing market will only make things worse. Yet, progressives like Moreno are inexplicably more trusting of governmental planning than the power of the free market – despite the miserable track record of the former when compared to the latter.
If Prop. 10 passes and both Moreno wins re-election, don’t be surprised if a rent control ordinance find its way onto a future Anaheim City Council agenda.