Just when “the people have spoken” and voiced their displeasure of Prop 10, the specter of rent control rears its ugly head again. Despite the landslide defeat of a Prop 10 on the statewide ballot, the fight between tenants and housing interest groups is far from over.
Leading the charge in this initiative is a group called Housing is a Human Right or HHR for short. This group, the housing arm of the AHF has filed their intuitive (Rental Affordability Act) with the California Secretary of State’s office with the hopes of appearing on the November 2020 ballot.
In a nutshell, this initiative allows for local jurisdictional control, thus bypassing the statewide initiative and allowing each jurisdiction to decide what kind of rent control laws they wish to impose on rental properties while also imposing parts of the statewide rent control initiative.
If this seems familiar, it should. You need only to review the recent Oregon rent control law to see why. This initiative allows landlords/owners of rental buildings to set their own rent, but only for the first 15 years from the date of occupancy certification.
After that 15 year time period, the local jurisdiction can then to decide how and which rent control laws to impose on the property. The way this initiative reads now, landlords would be granted a “fair” rate of return, however, it remains unclear precisely what that means or how it would be applied.
What exactly is being proposed by the HHR? (The RAA Rental Affordability Act) Allows local jurisdiction expanded control both during occupancy and vacancy. An example of this is the clause that states; Landlords would not be allowed to raise rents to market rates upon a vacancy. They are essentially imposing their version of the state’s rent control proposition at the local level.
Landlords would only be allowed to increase rental rates on vacated units no more than 15 percent over three years, with one concession, that the owners of only one or two buildings would be exempt from this law.
There is still a long way to go before this goes on to the ballot. The initiative will need the State Attorney General’s office to check, and summarize the contents, write an impact statement detailing how the initiative will impact the state budget, and then released to supporters who are tasked in gathering enough signatures to qualify for the ballot.
The process is laborious with many steps yet to go, but make no mistake this is being promoted by powerful and well-heeled groups who have a vested interest in seeing this through to the end. To give you an idea of how much money is on the table, RAA spent $25 Million on Proposition 10. We will be keeping a close eye on this as it progresses.
