Big win for multifamily landlords as California voters quash rent-control expansion

by TRD Staff

Landlords across California awoke to good news: California voters appear to have firmly rejected Proposition 33, a measure that would have allowed cities to expand rent control laws.

The ballot measure had notched 61.6 percent of statewide votes against, with 95 percent of precincts partially reporting, according to the California Secretary of State.

Prop. 33 was supported by the Hollywood-based AIDS Healthcare Foundation, and would have allowed cities and counties to pass stricter rent control laws than they can now, the Los Angeles Times reported.

Opponents in the real estate industry had said Prop 33 would curb apartment investment throughout the state, exacerbating an affordability crisis. Supporters argued it would do the opposite.

The measure would have overturned a state law known as the Costa-Hawkins Rental Housing Act, which bans local governments from capping rent on vacant units, single-family homes and apartments built after Feb. 1, 1995, or earlier in some cases.

Its defeat marked a third strike against AHF, which had financed two similar initiatives in recent years.

Each rent control measure was rejected by voters after the real estate industry outspent supporters, contending they would curtail housing construction and make the affordability crisis worse.

By Sept. 26, the real estate industry had raised $66 million to defeat Prop. 33, with $34.45 million coming from the California Apartment Association, $22 million from the California Association of Realtors and $5 million from the National Association of Realtors, according to campaign finance figures.

Supporters had raised $40 million, with all but $600,000 from the AIDS Healthcare Foundation.

Seeking to stop further rent control initiatives, the California Apartment Association sponsored a companion ballot measure, Proposition 34, which as written would block AHF from spending revenues from a federal prescription drug program on anything but healthcare.

Prop. 34 passed with 51.5 percent of the vote, according to the Secretary of State, effectively preventing AHF from bankrolling further rent control initiatives.

— Dana Bartholomew

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