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Analyzing No on Prop. 21 campaign ads

Rent control heads to the November ballot in California
Posted at 11:36 AM, Sep 18, 2020
and last updated 2020-09-18 17:15:56-04

SAN DIEGO (KGTV) -- The cost of housing is a huge issue in California, as the issue of rent control heads to the November ballot.

Proposition 21 would allow local governments to establish rent control on residential properties over 15 years old. It allows rent increases on rent-controlled properties of up to 15 percent over three years from previous tenant’s rent above any increase allowed by local ordinance.

The proposition would exempt individuals who own no more than two homes from new rent control policies.

Mark Doering is a landlord who rents out two homes. While Prop. 21 would not apply to him, he said he is against rent control. "I think the government has put enough burden on landlords like myself," he said.

During the pandemic, numerous local governments issued bans on evictions for those facing hardships due to COVID-19. While Doering understands this difficult time, he said he and other landlords depend on the rent money.

"If they relied on that rent, they're in a bad enough situation as it is right now," Doering said.

The No on 21 ad airing on television is sponsored by the California Apartment Association, with major funding from Essex Property Trust and Affiliated Entities, Equity Residential, and AvalonBay Communities.

Pt. Loma Nazarene University's Chief Economist Lynn Reaser said the No and Yes on 21 ads do not actually explain what will happen if the measure passes.

“It allows local governments to set their own rent control measures that would be different from what the state now has, which basically caps rent increases at 5 percent plus rate of inflation,” Reaser said.

The ad claims that voters rejected a similar measure two years ago, which is true. There are a few differences with Prop. 21 than Prop. 10, which failed in 2018. This measure would apply to housing more than 15 years old. Owners with one or two properties would be exempt.

Reaser analyzed Census statistics and said roughly one out of 10 rental units would be affected by Prop. 21. About 45 percent of Californians are renters.

In San Diego County, about 450,000 rental units would be affected, or about 85 percent of all rental housing.

The ad also claims that Prop. 21 would reduce home values by up to 20 percent. Reaser said it is likely property values will decrease over time, but not immediately.

"That will spill over into lower property taxes, which funds primarily our schools," Reaser said.

The Legislative Analyst's Office said even as owners sell off their properties, "revenue losses from lower property values would be larger than revenue gains from increased sales."

"It's very important to vote, but it's also very important to be an informed voter," Reaser added.

More: Analyzing Yes on Prop. 21 ads for rent control

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