Follow the money. The famous Watergate slogan got new traction Sept. 27 after a blockbuster expose by the New York Times revealed that the president of the United States paid no federal income taxes for 10 of 15 years before he assumed office – largely thanks to gimmicks and massive tax breaks available to wealthy real estate developers. The Yes on 21 campaign has also followed the money to investigate the root cause of growing homelessness in California. Unsurprisingly to advocates for renters rights and affordable housing, the money trail leads to billionaire Big Real Estate developers and corporate landlords, some of whom may actually have engaged in possible money laundering to stop Proposition 21.
Prop 21 is the November ballot measure that puts limits on unfair, sky-high rent increases, reins in corporate landlord greed, and prevents homelessness. Top experts at USC, UCLA, and UC Berkeley agree that sensible rent limits are key for stabilizing California’s housing affordability crisis. That’s why U.S. Senator Bernie Sanders, labor and civil rights icon Dolores Huerta, Congressmembers Maxine Waters, Karen Bass and Barbara Lee, the California Democratic Party, and the Los Angeles Times, among many others, have thrown their full support behind Prop 21.
Housing is a personal issue for both Michael Weinstein, co-founder of AIDS Healthcare Foundation and a major backer of Prop 21, and Rene Moya, campaign director for the Yes on 21 campaign and executive director of Housing Is A Human Right.
Weinstein grew up in rent-controlled apartment in Brooklyn. His father was a truck driver and his mother was a file clerk in a medical office.
“Rent control gave us security we needed as a family,” Weinstein said during a tele-town hall Sept. 25 explaining Prop 21. “When I grew up, even in relatively poor neighborhoods, nobody was worried about being out on the street. You had the Bowery in New York. But basically, if you worked at a full-time job, you knew you would be able to afford a place to live. Now-a-days, that’s not true any longer.”
The change has been dramatic, fueled by Big Real Estate developers who see housing as a profit-making commodity, not a basic human right.
“It’s a question of what kind of a city, county, and state we want to live in. Do we want it to be a place where only the rich can afford to live and everyone else is pushed out? That’s what’s happening,” says Weinstein. “The reality of the matter is that the No [on 21] campaign against rent control is being funded almost 100% by the largest corporate landlords in the country. And they’ve turned housing – a place to live – into a commodity. They’ll go to any lengths to make sure they can continue to profit — usually from the suffering that’s going on. My organization (AHF), over the last three years, has been buying hotels and converting them into housing and we’re doing that at a price that people can afford who are on disability or on social security or people who have a minimum wage job. People are so grateful to have that little bit of dignity that we can provide for them – something we took for granted in the past.”
The essence of Prop 21, says Weinstein, “is that it gives a fair right of return to landlords but it gives a predictable situation for renters where they will not be shocked by huge rent increases. And what we’ve seen in the last 10 years is a huge difference between how much people’s wages have been increasing versus how much their rent has been increasing — and its unsustainable. And in this COVID pandemic time, it’s really a desperate situation. We already are the homeless capitol of America and it’s only going to get worse. And that’s what personally motivates me to be involved in the battle to pass Prop 21.”
Housing is “deeply personal” for Moya, as well.
“As a Latino who grew up with working class parents in a neighborhood that is now massively gentrified, I have unfortunately seen a lot of my friends, my family, and a lot of my neighbors get pushed out of their neighborhoods and lose their homes,” Moya says. “What motivates me in supporting and working on the Prop 21 campaign is really this urgency that we are facing. California has the worst housing affordability crisis in the entire country. We have 27% of all the homeless people in the county. We have a majority of the 17 million renters of California who can’t afford to continue paying the rent at these high levels. So, what we want with Prop 21 is to bring some fairness, some balance to our housing market so that both landlords and renters and absolutely homeowners can all benefit in this state and everything that it brings to us. So that is why I’m supporting Prop 21.”
Moya clarifies Prop 21’s impact on homeowners.
“My mom owns a home. She is a working class Latina who was able to buy a house with my dad in the 1980s. They were lucky. They bought a house for $72,000 in 1986. If I try to buy the exact same house now — that would not be $72,000; it would be $720,000,” says Moya. “She only owns one house. Even if she rents a room in the house — Prop 21 will not affect them. They will be exempt from rent control. And if my mom owned a second home and wanted to rent out that second home, then it would be exempt from rent control. Our initiative really does exempt and protect homeowners and very small landlords. And it protects renters by altogether.”
“I want to make this clear: if an individual has two units or less, they will never be covered by rent control under this law. And if you want to rent your house or you have a duplex and you want to rent it out, that is permanently exempt under this proposal,” says Weinstein.
What about new construction?
“Our initiative does not allow for rent control on new construction. If you have just recently built an apartment, rent control will not applied to that apartment. And that makes sense. Most of the construction in California that’s happening — I think it’s 80 to 90% of all housing that is being built in California — is unaffordable. It is literally luxury housing. So it doesn’t really make sense to apply rent control to those buildings when they’re first built,” says Moya.
Meanwhile, current state law stops local municipalities from expanding rent control protections, even if they wanted to do it, Moya says.
“What we have at the state level is a law that is called an anti-gauging law,” Moya says, “which means a landlord cannot be increasing the rent by 50% or 100% on certain units. The problem is that a lot of renters themselves are not protected by that law, number one. Number two – that law allows rents to increase up to 10% a year. Not many people that I know receive wage increases or social security increases of 10% a year. I think the vast majority of us will be lucky to see a 2% or 3% increase in our income. And so being able to absorb a 10% increase on your rent every year – that’s the path to homelessness for most people.”
And, number three – that new anti-gauging law will expire in the next few years. “So, the current state law is not permanent protection, unlike actual right control,” says Moya. “And finally, I think this is really important: a lot of our cities right now are trying to do everything that they can to stop people from getting pushed out of their homes due to COVID-19. The problem is that state law, including this new law, doesn’t actually give local communities the power to be able to protect more people So, for example, here in the city of Los Angeles, our city council passed a rent freeze. That rent freeze, however, only can apply to renters who [live] in a rent stabilized unit. And so that’s a problem. That means that a lot of renters in the City of Los Angeles right now can experience rent increases even while they’re losing their jobs or their hours and their wages are being cut. Even as their spouses lose their jobs or have their hours and wages cut. This is a problem.”
And the city council can’t do anything about it.
“In fact,” Moya says, “they have asked the government to be able to help them provide more assistance. So, this is where Prop 21 comes in. Prop 21 is real rent control. It’ll allow us to protect more people with actual rent control so that rents can only increase by a few percentage points a year. At the same time, it’ll give our cities and county the power that they need in emergency situations like this one to be able to respond quickly and protect as many people as possible.”
Weinstein is blunt. “You can’t get blood from a stone if you’re on a fixed income,” Weinstein says. “You already have very large number of people in California paying more than half of their income in rent.”
Weinstein says he came to California in 1972 for the California Dream. “I came here for the beauty of it. I came here for the diversity of California. I came here because, frankly, it was an inexpensive place to live. And now it’s become the opposite. If we want that California Dream to survive, the only way we’re going to get it is through the action of the voters — because the legislature is controlled by Big Real Estate. You cannot get anything through the legislature. They have veto power. The California Apartment Association, which is dominated by billionaire landlords, has total control over the legislature.”
Until 1995, the cities controlled housing and rent.
“The real estate interests didn’t like that,” says Weinstein, “so they decided to get the legislature to pass a law that took all that power away from local government and gave it to Sacramento and prohibited these communities from having rent control after 1995. Not only that, but they also said that if you had a law prior to that — it just froze that community to that date.”
So two buildings could be right next to each other in Fresno or Bakersfield or San Diego and the one built before 1995 is covered while the one next to it, built a year later, can never be covered.
“That’s how the law reads right now,” says Weinstein. “It is pretty baffling as far as why there’s such a difference over something like just a year. And that’s what we got to fix.”
But the opposition to Prop 21, funded by some of the largest corporations in the world, like the status quo.
The No on 21 side is “trying to scare tenants and tell them that Prop 21 will be bad for them and it’ll allow your rent to increase by 15%. That is exactly a load of baloney. It flies in the face of what we’re trying to do,” says Moya, emphasizing the goal is to protect renters. “I just want to warn voters that No on 21 side has a lot of money. They’re spending $2 for every $1 that we spend because they are big corporations. I want everyone to be skeptical of those TV ads, because ultimately they’re trying to bamboozle renters.”
Weinstein also pointed to No on 21’s dirty tricks.
“They will say anything. I mean, they literally will say anything. There’s no lie too false for them to make, to claim. In fact, they actually have an ad that says [Prop 21] doesn’t protect renters! They actually have an ad that says it hurts seniors, that it hurts veterans,” says Weinstein. “But you know — what’s going to happen to property values if the homeless situation in the cities of California triples from what it is now? I mean, it’s so horrible. I could easily triple on the path that we’re on now. How is that going to be for communities?”
Weinstein recalls how during the financial crisis, Big Real Estate investors such as Invitation Homes and Blackstone “swooped in like vultures,” foreclosing on homes.
“After they had taken over ownership of them, they rented them back to the people who owned them before and jacked up their rent,” Weinstein says. “It’s about balance. I mean, things are very, very unbalanced. They were talking about fires — that homeless people, particularly in the cold weather months, create a fire in the wilderness and then it starts a forest fire. I mean — this is no way for us to live. This is not what we wanted for California.”
(Photo: AHF President Michael Weinstein (left) and Yes on 21 campaign director Rene Moya at a campaign rally.)
See this Prop 21 tele-town hall and others on the Yes on 21 Facebook page.