By FELICIA MELLO
Californians today rejected a rent control ballot measure that inspired more than $150 million in campaign spending and laid bare competing visions of how to respond to the state’s housing crisis.
Proposition 33, which 62% of voters opposed in vote totals this morning, would have given cities more freedom to limit how much landlords can raise rent. It would have repealed a state law known as the Costa-Hawkins Rental Housing Act that bars local governments from regulating rent on single-family homes, apartments built since 1995, and units where there’s a new tenant.
Opponents — including landlords, realtors and some YIMBY groups — had argued Prop. 33 would have reduced incentives to build new housing at a time when the state desperately needs it. They also warned that cities such as Huntington Beach that have resisted building affordable housing would intentionally use Prop. 33 to set rent caps so low that they make development impossible.
Supporters of Prop. 33 included tenant groups, unions, the California Democratic Party and the AIDS Healthcare Foundation, Yes on 33’s major donor. They said that tenants burdened by the state’s high cost of living need relief now and that rent control is a key strategy to fight homelessness and displacement. And they argued that concerns about chilling the housing market were overblown, comparing them to fears raised by businesses that increasing the minimum wage would lead to mass unemployment.
The initiative marks the third time in recent years that tenant advocates have tried and failed to expand cities’ ability to enact rent control. Voters rejected similar ballot measures in 2018 and 2020.
“(Voters) understand that the answer to our housing crisis isn’t more red tape — it’s building more housing,” said Nathan Click, a spokesperson for the No on 33 campaign.
Susie Shannon, campaign manager for Yes on 33, said the state had missed an opportunity to check the power of corporate landlords. “There will be more tenants displaced, there will be more tenants who become homeless, there will be more who have to move out of their neighborhoods and there will be more who choose to move out of California because they don’t want to become bankrupt or homeless,” she said.
Shannon also blamed Gov. Gavin Newsom for breaking with the California Democratic Party and lending his name to the No on 33 campaign, which she said “confused” Democratic voters.
Legislators like Sen. Toni Atkins and Assemblymember Buffy Wicks, who are known for supporting housing construction, also came out against Prop. 33. So did editorial boards of the state’s major newspapers, some criticizing as too broad a sentence in the proposition that would prevent the state from putting future limits on cities’ ability to enact rent control.
Pitted against these establishment voices was the outrage Californians felt about the state’s astronomical housing costs. Renters make up a bigger share of households in California than in any other state except for New York and nearly a third spend more than half their income on rent. Advocates with the Yes on 33 campaign, who were outspent by a margin of more than 2 to 1, said they were relying on a strong ground game to convince renters that supporting the proposition was in their interest.
The role of the AIDS Healthcare Foundation added another wrinkle to the debate over Prop. 33. The nonprofit, which also bankrolled earlier attempts to overturn Costa-Hawkins, is itself a landlord, operating affordable housing in Los Angeles. A Los Angeles Times investigation last year found that it housed tenants in squalid conditions and evicted some over small unpaid debts. Landlords took aim at the group, funding another ballot measure, Prop. 34, seemingly aimed solely at curtailing the nonprofit’s ability to fund pro-rent control campaigns.
Like other housing-related debates in California, the one over Prop. 33 was also about local vs. state control. In the 1970s and ‘80s, progressive cities with growing housing costs and strong tenant movements enacted sweeping rent control measures limiting annual increases across the board, including when new tenants moved in. By passing Costa-Hawkins, state legislators made such vacancy control illegal and prevented cities from adding newer units to their stock of rent-controlled housing. Now, some city leaders want that freedom back.
“We have millions of people that are rent-burdened and are being asked to address the issue of homelessness,” said Los Angeles City Councilmember Hugo Soto-Martínez, who authored a resolution passed by the council in support of Prop. 33. “The conversation has to be about how do we use the levers that we have to ensure that working-class renters aren’t being displaced.”
But not all do: San Diego Mayor Todd Gloria and San Jose Mayor Matt Mahan were among local leaders who lined up against Prop. 33.
Prop. 33 also raised the question of how California should balance building new affordable housing with preserving units that are already accessible to low-income tenants. The state is seeking to add affordable units to the market while simultaneously losing others because Costa-Hawkins allows landlords to bump rents to market rate whenever a tenant moves out. Meanwhile, any new housing added to the market is not subject to local rent control.
A state law already limits rent increases in buildings more than 15 years old to 10% per year — but that’s higher than most local rent control ordinances, and the law is set to expire in 2030.
As housing costs have skyrocketed, a new wave of cities has enacted rent control, including “displacement destinations” like the Bay Area city of Concord, where residents have fled after being priced out of more expensive cities. Costa-Hawkins has limited the number of units those local laws can apply to.
Though Prop. 33 failed, California will likely still see more jurisdictions starting rent stabilization programs within the confines of existing state law, renter advocates say.
That could create momentum for future changes to the law. “When more cities have rent control it will be more logical to repeal (Costa-Hawkins),” said Shanti Singh, legislative director for Tenants Together. “You’ve got to make it an issue for everybody.”
State legislators could choose to pass a more modest revision of the law — for example, expanding eligibility for rent control to newer buildings but continuing to let landlords raise the rent beyond local limits when new tenants move in.
That was the path San Francisco supervisors planned to pursue if Prop. 33 passed — one backed by both progressive and moderate Democratic officials in the city.
They could also extend the state’s current 10% rent increase cap after its scheduled expiration date of 2030, or lower that cap for the buildings the law covers, as the Los Angeles Times called for in an editorial rejecting Prop. 33.
