Why California Needs Prop 21?

17

MILLION
RENTERS IN
CALIFORNIA

1 IN 3

CA RENTERS

spend 50% or more of their income on rent

92 HRS

WORKED PER WEEK

for a minimum-wage employee to afford the average one-bedroom apartment

200%

RENT INCREASES

putting rent in CA 2X the national average

2,000

HOMELESS

LA residents forced into homelessness with every 5% increase in rent

How Did The Housing Crisis Get So Bad?

Skyrocketing Rents vs
Stagnant Wages

Big
Real Estate

Real Estate
Speculation

Systematic Racism +
Community Displacement

Political
Paralysis

What Else Do I Need to Know About Prop 21?

No. In fact, it could help limit tax increases. Prop 21 will help keep more people housed, which means fewer services needed for unhoused people in your community. In fact, homelessness is extremely costly for the state: a chronically homeless person costs the taxpayer an average of $35,578 per year. Those services are paid for with your property taxes. The fewer services that people need, the less property taxes will increase.

Prop 21 allows for reasonable rent increases once a year, which is called rent stabilization. With rent stabilization, renters  have a better idea of what their rent increases will be for the next year and adjust their budgets for it while allowing a landlord to have money to invest back into the unit for repairs, insurance, and taxes. 

Prop 21 won’t change the rent control laws already in place. But it will give your community the right to expand your current rent control laws to protect more low-income and working-class renters.

Prop 21 guarantees a landlord’s right to a fair profit. That means that any city or county that adopts rent control will not infringe on a landlord’s right to a return on their investment.

No. Vacancy control has no impact on how much rent is charged while a tenant is living in the unit. It guides how much the cost of an apartment can be increased before the next tenant moves in. The rent for the new tenant will only be increased based on the allowable rent increase for that year. Landlords could add 15% if the previous tenant lived there for more than three years to upgrade the unit.

Right now, landlords can raise the cost of rent on any apartment as much as they like after a tenant moves out—sometimes doubling or even tripling the cost of rent on a unit without putting much investment in the unit. This leads to unsustainably high rents for all of us and encourages evictions of longer-term renters, especially seniors. Prop 21 will help take the target off of the backs of long-time renters.

Prop 21 does not preclude the adoption of statewide rent regulations. (In fact, we encourage our elected officials to do more to protect renters and homeowners alike!) It affords local communities the power to set limits on rent increases depending on conditions locally, as they see fit. Right now, both the state and local communities have very limited powers to do so. Prop 21 will change that.

No. Assembly Bill 1482 went into effect at the beginning of 2020 to address only the most excessive rent increases, While AB 1482 is a significant first step, renters need further protection. AB 1482 limits rent increases to 10% each year, which is still unacceptably high if your income doesn’t go up 10% each year.

In fact, research shows that AB 1482 only directly impacts 7% of rent increases in the state, meaning the vast majority of renters will still absorb rent increases that far outstrip the cost of living.

In fact, AB 1482 only protects a limited number of tenants, and it expires in ten years. Prop 21 would never expire, and it would cover mobile home renters as well as other types of housing. 

No. Prop 21 doesn’t interfere in a landlord’s ability to provide a safe and habitable unit for their tenants. It does not prevent landlords from raising rents or evicting problem tenants.

The latest research strongly suggests that rent stabilization policies reduce rents for the tenants they target and provide additional benefits to the community by increasing residential stability, preserving affordability in neighborhoods, and protecting tenants from eviction.

1. Rent control improves affordability in rent-regulated units
2. Most studies have found that rents did not rise and in some cases were even lowered in areas adjacent to rent-regulated neighborhood
3. In the San Francisco Bay Area, renters collectively spend $4.4 billion beyond what they can afford on rent, money that could otherwise be used for other things

1. Rent control and just-cause evictions policies have protected social and economic diversity in Berkeley and Santa Monica
2. Data from Berkeley and Santa Monica show that rent control continues to protect vulnerable renters and hold down rent prices
3. A comprehensive 1998 report by Berkeley’s Planning and Development Department noted that rent control did not negatively impact new apartment construction; the report showed that building permits hit their highest levels since 1971 in 1989—nine years after the passage of rent control.

1. Rent control directly increases stability and affordability. Tenants living in rent-controlled units move less frequently and are less likely to be forced to move
2. Tenants in rent controlled units also pay substantially less than tenants in non-regulated units: $3,240 less per year in Los Angeles, $5,460 in New York City, and $18,000 in high-cost Manhattan
3. Rent control is the only policy tool that can immediately provide relief to renters facing unaffordable rent increases. Because rent control covers private rental housing where the vast majority of renters live, it outperforms all other affordable housing tools in terms of scale of impact.
4. The stability created by rent control disproportionately benefits low-income households, people of color, seniors, and families with children, who are most at risk of displacement and forced moves.

1. Based off a historical study of rent and income in Los Angeles, this study recommends expanding rent control and vacancy control to protect Los Angeles tenants
2. Rents in Los Angeles are increasing at a time when real income is falling: the 2009-11 median income was actually 2% lower than it was in 1970, median rents over that same period increased 85% (both figures adjusted for inflation).
3. The impact of rising rents hits the lowest earners (those in the bottom quintile) especially hard. 54% of this group was severely rent-burdened (paying more than half of their income for rent), but by 2009-2011 that figure had risen to nearly 78%.
4. Los Angeles has lost a significant number of rent controlled units over the last few decades: while in 1982 almost 100% of apartments were rent controlled, today only about 80% fall within that category. When single-family home rentals are included, the share of units covered by RSO drops to 73%.

1. In the City of Berkeley, rents have risen 50% in non-controlled units and yet only 10% of that increased rent is being reinvested in the community through building renovations and increased tax payments
2. The City of Berkeley’s Rent Board’s 2010 economic study found that overall rents had increased by slightly more than $100 million annually, over and above the increases necessary to provide an inflation adjustment to cover increased costs and maintain profitability.
3. For the City of Berkeley, rent control policies have been an incredibly cost effective way to protect renters; the city’s rent board has an annual budget of approximately $4 million whereas providing comparable benefits through vouchers would cost $20 million annually.  New construction to build social housing would require a capital investment of $220 million.

1. When the housing market is as dysfunctional as it is in many parts of California, tenants are effectively subsidizing landlords with rent payments above what a fully competitive market would allow landlords to charge.
2. Rising rents have pushed many residents into homelessness. California now has the largest number of people experiencing homelessness among all 50 states, and research shows a clear link between rising rents and increased homelessness.
3. Stabilizing rents would have broader benefits to the state’s economy, environment, and public services—from improved traffic conditions and reduced traffic-related greenhouse gas emissions, to increased spending by tenants in their local economy.
4. Seniors, Latinos, African Americans, low-wage workers, and families with children face the most severe burdens from the housing crisis. Rapidly increasing rents are displacing residents to areas with fewer quality jobs, well-performing schools, and other resources—reproducing racial segregation, particularly in suburban areas far from urban jobs centers.