California Voters Reject Rent Control Expansion Measure

SACRAMENTO (AP) — Californians soundly rejected a ballot measure Tuesday that would have allowed more rent control as a way to alleviate the state’s housing crisis.

Proposition 10 was losing by a 30-point margin with more than 3.6 million votes counted.

It was one of the most costly and contentious items on the ballot, attracting more than $100 million in campaign contributions.

Opponents said the measure would have lowered real estate values and further decreased the state’s already limited housing supply by discouraging building. Supporters argued more rent control would protect low-income people from being priced out of their homes.

The failure of the measure preserves restrictions limiting rent control on apartments built after 1995, single-family homes and condominiums. It also preserves rules preventing cities and counties from telling landlords what they can charge new tenants.

The AIDS Healthcare Foundation, a Los Angeles-based nonprofit known for backing controversial ballot measures, provided most of the money supporting Proposition 10. The real estate industry funded the bulk of the opposition campaign.

California has a disproportionately high rate of homelessness, and nearly a third of California renters spend more than half their income on rent, according to the state’s housing agency.

More than a dozen California cities including Los Angeles and San Francisco already have some rent control on properties built before 1995.

The nonpartisan Legislative Analyst’s Office predicted the initiative would have lowered the value of rental properties. Economic research generally shows that rent control benefits some individual renters but it limits supply overall and raises rents because it decreases incentives to build.

Both candidates for governor opposed the initiative, along with the NAACP’s California conference and the California Chamber of Commerce.

The lion’s share of funding for the $75 million opposition campaign came from the real estate industry. The California Association of Realtors was the largest single donor, followed by Essex Property Trust and investment firm Blackstone.

Proposition 10 supporters included the state Democratic party, the California Teachers Association, and Vermont Sen. Bernie Sanders. The AIDS Healthcare Foundation contributed $23 million of the $25 million raised to pass the measure.