Prop. 98 debate: Is rent control worth saving?

A number of smart people have been encouraging me to post on the dueling eminent domain propositions, Proposition 98 and Proposition 99. Because I could not get an appointment for an elective root canal today and was turned down in my bid to volunteer for jury duty, it appears a political discussion cannot be avoided (Aside: there is an election coming up, on June 3, in California).

Naturally these are somewhat complicated propositions, and there is a slim chance that over time I will do justice to the subject. Slim. But not now, not here. My question is this: is rent control worth keeping?

Proposition 98 would outlaw new rent control laws and phase out the old ones. From the Legislative Analyst's Office summary: "The measure generally prohibits government from limiting the price property owners may charge others to purchase, occupy, or use their land or buildings. This provision would affect local rent control measures. Specifically, government could not enact new rent control measures, and any rent control measure enacted after January 1, 2007, would end. Other rent control measures (those enacted before January 1, 2007) would be phased out on a unit-by-unit basis after an apartment unit or mobile home park space is vacated. Once a tenant left an apartment or mobile home space, property owners could charge market rate rents, and that apartment unit or mobile home space would not be subject to rent control again."

Good idea or a bad idea? Make your case. E-mail story tips to peter.viles@latimes.com.

Comments

[Todd]

Great idea. I am a supporter and contributor to this cause. Apartment Owners Association is leading the fight. May Prop 98 win and kill rent control for ever.

[IToldu2CashOut]

I don't know about rent control here in LA but I know in NY there have been a number of negative consequences from it. For example, it can cause people who are non-rent control to end up paying more rent because it changes the natural economics of supply and demand. People who end up with really great deals often will never give up their apartment even if they leave the city, thus decreasing the supply of apartments. They often keep the rent control place as a second home or rent it out to someone else on the sly. Of course i feel bad for renters who get forced out by greedy landlords, but I'm not sure these laws have a positive effect over many years. I've heard of people who had the same place for like 15 years and are paying like $300 for a $1800/month apartment. This doesn't really seem fair to anyone. Maybe they should create a cap of like 7 years for a rent controlled apartment as a compromise.

[Larry Gross, Coalition for Economic Survival]

Proposition 98 is a deceptive doomsday measure that a group of wealthy landlords spent millions to put on the ballot. These landlords want you to believe the measure is only about “eminent domain,” but Prop. 98 is full of hidden provisions that would hurt all Californians.

• Prop. 98 attacks renters by eliminating renter protections and rent control.

• Prop. 98 guts important environmental protections like laws we need to combat global warming, and protect our land, air, water and coasts.

• Prop. 98 jeopardizes the quality of our drinking water and our ability to secure new water sources to protect our environment and fuel our economy.

• Prop. 98 will result in frivolous lawsuits, higher taxpayer costs, and hurt our economy.

That's why a broad coalition including AARP, League of Women Voters of California, the Coalition to Protect California Renters, Golden State Manufactured-Home Owners League, Inc. (GSMOL), California Professional Firefighters, California Alliance for Retired Americans, California Teachers Association, California Police Chiefs Association, California Chamber of Commerce and a long list of others all oppose Prop. 98.

Many of these same groups are also supporting a real eminent domain reform on the June 3rd ballot.

Proposition 99 is the straightforward solution we need to protect against eminent domain abuse. Prop. 99 prohibits government from using eminent domain to take a home to transfer to a private developer. Unlike the landlords’ Prop. 98, Prop. 99 is eminent domain reform with NO HIDDEN AGENDAS.

Please be sure you have the facts and vote NO on 98 and Yes on 99 on June 3rd.

[Vindicated]

So a person owns something and then the government is able to manipulate what you can do with it and how much you can sell it for? I think it's pretty obvious how fascist rent control is. Funny thing is I've lived in a rent-controlled apartment for 8 years! Ultimately though, rent control does little to benefit investment and progress. And since we are in the United States, it's something that has nothing to do with the principles this country was founded on.

[Randy Adams]

Yeah, Apartment Owners Association. There's a real grassroots group for you. I'm a property owner and I am in favor of the current form of rent control. This one will die a death.

[John]

98 won't pass because most Californians lack critical thinking skills.

Since the passage of 99 overrides the passage of 98 due to the "poison pill" provision of 99, 98 is pretty unlikely to pass, unless a majority of CA voters are smart enough to vote yes on 98 and no on 99.

It's a shame though, as L.A., has so much land that developers would start another housing bubble for apartment buildings, tearing down dingbats and throwing up 5-10+ story buildings, and then supply would outweigh demand and there would be more cheap rentals available.

Oh well, we'll just have to wait for all those unsold condos to convert to apartments if we want the rental supply boosted.

[dclogang]

In this market will rent control make much of a difference anyway? Although I keep reading two sides of rent rates. One day I'm reading rent will go up and another rent will go down. which is it and how will this affect these two Props?

[jerome]

LA Rent control changes as proposed here won't
effect anyone until they move. The phasing out
starts with new tenants moving in under non-
controlled pricing and increases. It will increase
landlord harassment of long term holdouts and
any bill needs to add special penalities for such behavior. I know of a landlord who came in to
fix a toilet, took the toilet, and never returned
with a replacement. Another took off the front
door and never returned with a replacement. In
both cases the tenants had to leave the unit
as they could not live there. What they should have done is document the repairs they did themselves in replacing these items and deduct from rent. Tenants in this readership need to protect themselves more against the hardball games of motived landlords.

[Laker]

I don't think this has a chance to pass. I think there are little more apartment renters than building owners....
Also, if you do cancel rent control, it would reward speculators and investors to buy more RE for renting purposes, that will increase the pressure on pricing to go up as demand for that will increase. However, on the other hand, if rent get very expensive, it will simply drive people out of LA and/or out of CA.
supply and demand need to meet somewhere.

[Andy]

Commuinism has collapsed everywhere ELSE in the world - hopefully California will stop dabbling in it before economic catastrophe overtakes it.

If there aren't eniough apartments people can afford, the state could always try reducing the insane amount of taxes and regulation on businesses so they can create more good jobs, and simplifying the building code and permitting process so more dwellings can be built.

[David]

we need rent control ! It is good for society and business. Business benifits from being able to fill low wage postions and society benifits from having those postions filled. Massachusetts recently abolished rent control and it had a devastating effect on neighborhoods and communites. Hawaii is so expensive they have to fly in low wage food service workers because working people cannot afford to live there. The result is a two tierd society. Is this what we want? The current form of rent control is fair to owners, allowing market rate rentals after tenant vacancy and including cost of living icreases in rent for the landlords.

[Paul]

Eliminating rent control would do much to help alleviate the housing shortage in Southern California and incentivize property owner's to invest in their existing properties, particularly those currently affected by rent control laws; including the clearly political and void of all common sense Rent Control Ordinance the exists in the City of L.A..

[TakeFive]

Long, long overdue. Rent control is wrong in principle and is damaging to both neighborhoods and landlords.

Much like communism, it got a fair try, and was found wanting.

[Paul C]

Obviously owners are going to be for 98 and renters aren't. Pretty simple.

pbc

[Mike P.]

I worry that getting rid of rent control will push the middle class out of LA even faster. Our demographics are unsustainable if recent migration trends continue.

I usually tend towards letting markets (here renters vs landlords) work themselves out, but maybe because I rent (full disclosure), I have a more vested interest.

Renters are at the mercy of their landlords, unlike homeowners, who know the terms of their future house payments in advance (the terms of the mortgage). I think that was part of the justification for instituting rent control in the first place.

Either way I'm voting 'No' & 'No' on the dualing props.

[Against 98]

Economically, one can argue that old-fashioned rent control is ultimately bad both for owners and many tenants. But given the transaction cost of moving (and the difficulty of getting back a security deposit in non-rent control communities even when you've taken good care of the unit), something like the present West Hollywood situation seems like a practical compromise: landlords can negotiate as much rent as the unit will bear initially, but then rent increases are determined by a city board for the life of occupancy, and there's a government machine in place to handle disputes between tenants and landlords.

Imagine if renters were subject to the kind of boom and busts owner/speculators are going through now...

[KateNonymous]

Would an end to rent control mean that property managers would maintain properties better? For example, would it still take four years to get cold water in my kitchen?

[Scott]

Todd, are you a landlord or something? Please. Prices are completely out of control WITH rent control. When house prices finally come down, we should implement control over that too so that prices can never be out of whack with incomes EVER again. I don't know WHY people think they're entitled to $1200 of my hard earned money for an apartment that should be $700, or $1,000,000 for a house that should be at most $250,000.

This free market foolishness must go, it's all just completely out of control.

[Theron]

I don't think rent control is worth saving. While there may be people who society wants to help with their housing costs it seems most unfair to force this burden onto the shoulders of apartment owners.

[Matt]

Rent control is needed. This will be defeated. Rent control is critical to preserving Los Angeles for any working class family. If this passes, there will be a mass migration from the city. Since the "market" was not good enough for Bear Sters, I see no reason why it should be trusted with people's homes. But, this will fail hard, so I am not too worried about it. Think what would happen if landlords who got in over their heads with buying buildings cheap could just jack up the rents for their own mistakes.

[Dan]

I doubt 98 will win, but it would make prices more reasonable/fair here in Santa Monica if it did pass. Too bar so many politicians disregard economists.

[Kathy]

No, rent control is not worth saving, and I've lived in rent controlled buildings. I know a lot of folks will say that a city as expensive as Los Angeles needs it, but it really hasn't helped keep costs down, if you look at all the owners who were allowed to sell their buildings and evict tenants during the recent bubble. Rents are at an all time high in most of L.A. The percentage of rent controlled units has declined steadily in the last 5 years. I'd rather see the city try the co-op approach with rental buildings; with the recent downturn, I bet a few developers who are now stuck with condos and townhouses might consider that option.

[why is the roof still leaking]

In the space of three years my rent increased from $800 to $1200, keeping pace with market rates. However, in that time, the property owner has yet to replace the a/c filter, sweep the chimney, clean the outside windows, or perform any other maintenance save for changing the 9-volt battery on the smoke detectors (something I could easily do myself). I'm not sure how the rent increase is being used, but it certainly isn't being used to improve or maintain the property, and I find it hard to believe that paying for my water or trash has increased by $4800/yr. Living in a non rent-controlled area, I can only say I wish there were more protections for renters from being gouged. It's easy to raise rent, and it's hard to move, especially since it requires more money and time; property owners take advantage of that fact because the law lets them.

[toby]

Depends on what kind of Los Angeles you want?

Do you want a Los Angeles that doesn't have workers to work at...oh...I don't know...the gas station, tellers at banks, workers at restaurants-fast food-Best Buy...

Do you want a Los Angeles were a landlord can finically evict you (raise you rent 500 dollars with a 30 day notice) just because he has a friend moving to town?

Do you want a Los Angeles where deposits are only in name alone. In actuality, it's an addition months rent (that you don't get to use against rent) that you must pay before moving in and don't get back because...well...THE LANDLORD RULES ALL!

Well then by all means, vote yes on Prop. 98 & 99.

[perks]

Haven't made up my own mind on the issue yet. Personally, I tend to think it's more a decision that should be left to the cities than usurped by the state. I do have to wonder, though, how many homeowners who vote in favor of repealing rent control would strongly oppose any similar effort to repeal Prop. 13 (and how many of them would fail to notice their hypocrisy)...