What Is Proposition 33? The Rent Control Measure

CALIFORNIA — Of the 10 state propositions on the Nov. 5 ballot, there is one that has provoked strong opinions — Prop. 33, the measure that could open the door for expanded rent control in California.

The proposition has also drawn the most campaign spending. More than $350 million has been raised so far to fight or support the 10 measures, but more than half of that money is going to the rent control measure, CalMatters reported.

But what exactly does Prop. 33 entail? It isn't exactly a rent control measure, even though it has been called one.

If passed, the measure wouldn't enact any new laws. Instead, it would repeal a California law called the Costa-Hawkins Rental Housing Act, which banned strict rent control measures when it passed in 1995. The law prohibits rent control on single-family homes, construction built after 1995, and "vacancy control," which prevents landlords from increasing rent when a tenant moves out.

If Costa Hawkins is repealed, cities would have the authority to impose their own rent control rules — and make them as strict as they deem fit.

San Francisco has already passed a law that would take effect if Prop. 33 passes. It would bring rent control to 16,000 units in the city. Other left-leaning cities are likely to adopt stricter rent control laws, while more moderate communities are likely to keep things as they are.

The bill, sponsored by AIDS Healthcare Foundation founder Michael Weinstein, has appeared in some form or another during two other elections — 2018 and 2020. It failed both times. This election, it's polling much better than it did before amid a worsening housing crisis — but a majority of likely voters still oppose the measure (54 to 42), according to an Oct. 24 report from the Public Policy Institute of California.

Currently, California does have some form of rent control. State law prevents most landlords from raising a tenant's rent by more than 5% plus inflation for up to a total of 10% in one year, according to the state.

That's called "soft rent control," according to Michael Manville, a professor and the chair of Urban Planning at the University of California, Los Angeles. If Costa Hawkins were to be repealed, Manville says it would open the door for "hard rent control," which he believes would negatively impact the housing crisis.

"You can either have a very strong rent control that holds prices down but creates all sorts of other unintended consequences, or you can have a soft rent control like we have right now in California that avoids most of those unintended consequences, but also doesn't do nearly as much to hold down the price," he told Patch.

For example, Manville said there is evidence that forcing landlords to adhere to something like vacancy control — which keeps rent frozen regardless of circumstance — could lead to troublesome outcomes.

"You get all sorts of unfortunate side effects that maybe you didn't intend, which is to say landlords stop maintaining those units or landlords eventually withdraw those units from the market, either by trying to turn them into condominiums or by just holding them vacant," he said.

Enacting strict rent control laws, especially upon new construction, could also stymie housing production, added Manville.

Manville doesn't believe rent control is the answer to California's housing affordability, but Prop. 33 may be polling better in 2024 than the last two times it appeared on the ballot due to ever-climbing rental and home prices, he said.

"The frustration is understandable," he said. "Elected officials have said over and over again, 'Well, we're going to deliver more of this affordable housing.' And it's all been very slow. It's all been very expensive."

"It sounds a lot better to just say that with the stroke of a pen, you can pass a law saying that 'prices will not go up.' That's always been the appeal of rent control," Manville added.

Despite the cost for landlords, Prop. 33 could provide a lifeline for many, tenant advocates say.

“Families who are living in units that aren’t right for them will have a chance to move without losing their affordability,” Leah Simon-Weisberg, a tenant lawyer and chair of the city of Berkeley's rent board, told CalMatters. “For some people, it will keep them housed.”

Manville does agree that Prop. 33 would benefit some struggling on the rental market.

"You don't want to be a doomsayer that [says] if you pass laws like this, everything goes off a cliff, but they really do have unintended side effects, and they don't seem to do much to advance affordability for the typical low-income person," he said.

"What they do is they provide benefits for incumbents who happen to be in these apartments right now — provided that those tenants are willing to put up with, for instance, less maintenance and stuff like that."

Manville also fears that hard rent control policies could usher in back-door deals and a rental black market.

"If it's supposed to be a rent-controlled apartment, but you can only get in with $25,000 cash, you're not going to have rent control benefitting low-income people," he said.

Generally, proponents of Prop. 33 echo what Jimmy McMillan said in 2010, "the rent is too damn high."

Many argue that California's rental crisis is being spurred by wealthy, price-gouging landlords.

"We understand that mom-and-pop landlords have invested their life savings into their buildings and can identify with the plight of their tenants. The CA Constitution guarantees them a reasonable rate of return," according to the Yes on Prop. 33 campaign. "But it is the billionaire corporate landlords who are calling the shots and causing skyrocketing rents."

The campaign asserts that 55% of Californians are rent-burdened and shell out more than 30% of their income on rent.

In California, the median rent is $2,800 — that's 37% higher than the national median, according to Zillow. For comparison, in Oregon, the median rent is $1,850.