California SB 1257—Rent Control Reform or Local Disaster?

By California State Senator Tom Hayden (D-Los Angeles) in support of California SB 1257.

On June 30, while rent control was dying in the state legislature, Santa Monica renter Sam Weissman was run over and killed in a freak accident. Sam was 92, a retired businessman who began fighting for rent control in Santa Monica when he was 75. He is survived by his wife Pearl, 82, a longtime leader of Santa Monicans for Renters Rights (SMRR). 

I would not argue that the impending death of rent control killed Sam. Of course not. But the whole struggle for affordable housing and a livable community gave Sam Weissman an extraordinary energy for his years. 

I begin this draft obituary on rent control to ground the debate in what it was really about all along—that through rent control Santa Monica found a way to create a stable, diverse, livable community in spite of all theoretical and self-interested warnings to the contrary. It was not about "Soviet Santa Monica", not about political machines, not even about Tom Hayden. 

Senator Costa and the powerful landlord lobby are to be congratulated for their perseverance in lobbying to end local rent control for these many years. But in the name of a self-serving "free market" rationale, they would jettison more human values: to seek a better quality of life for families and communities through local control of housing policy. 

The facts are contrary to knee­jerk market theories. Santa Monica has preserved 30,000 units of affordable housing, nearly all of which is currently occupied by low-and moderate-income families. According to one UCLA study, "rent control has achieved the intended effects: stabilizing communities of renters most at risk of being pushed out by rising rents and gentrification pressures". Santa Monica rent control was far from perfect, but it has been a living denial of free-market propaganda. It met the constitutional requirement that landlords receive a fair profit. It redistributed wealth and created diversity. It did not lead lo disinvestment or decay. 

Finally, in addition to making the good life possible for 92 year old Sam Weissman, rent control made housing affordable for young couples who wanted to start families. That was the core SMRR coalition, a linkage between the old and the young that market categories or supply and demand cannot comprehend. 

It is inevitable that rent control in a few small communities cannot survive the onslaught of special interest money and politics forever. It is just as inevitable that the landlord's triumphal revenge will only deepen the affordable housing crisis for us all. If rent control is not the answer for people like the Weissmans, what is?

By California State Senator Jim Costa (D-Fresno) in opposition to SB 1257.

California policy makers have long recognized that a healthy state economy depends upon a sufficient supply of rental housing. That's why the Legislature is soon expected to pass SB 1257, which I sponsored, and which encourages housing by limiting some of the excesses of local rent control laws. 

Five cities, most notably Santa Monica and Berkeley, have lost sight of what is fair, and have administered rent control in an extreme and inequitable fashion. Their refusal to approve justifiable rent increases for building repairs or inflationary costs, and their bureaucratic hostility to property owners, have caused a decline in the maintenance and number of rentals in their communities. According to 1990 census data, over the past 10 years, these extreme rent control communities have lost thousands of rental units, while the supply of rental housing in surrounding communities with more moderate or no rent control has increased. 

Although advocates of extreme rent control argue that this should be an issue left exclusively to local control, they ignore the negative impact extreme rent control would have on the statewide housing supply if allowed to spread to other communities.

SB 1257 sets modest rent control guidelines to create an incentive for rental property owners to maintain and develop affordable housing for Californians. This measure exempts new construction from rent control and allows owners to adjust rents when there is a voluntary apartment vacancy. It will not affect the rent of any current tenant who chooses to remain in his or her apartment. 

In fact, most Californians who live under rent control, including apartment dwellers in the City of Los Angeles, will not be affected, since their local rent ordinances are in compliance with SB 1257. Under my measure, cities can have moderate forms of rent control and retain their existing authority and oversight for capital improvements, annual rent increases, and tenant eviction protections. 

The purpose of SB 1257 is to provide the incentive to keep existing rentals on the market and encourage the construction of more rental housing. Increasing supply is the best way to ensure affordable housing in the future. If a few local governments unwisely act to reduce housing opportunities for Californians, then some direction from the state is exactly what is needed.