Bid to repeal rent-control limits in California could be headed to ballot

SACRAMENTO, Calif. -- Tenant-rights advocates say they have enough signatures to ask voters to repeal a 1990s law that sharply limits cities' ability to impose residential rent control, potentially setting up a multimillion-dollar fight at the ballot box in November.

The law, known as the Costa-Hawkins Rental Housing Act, allows landlords in cities with rent control -- including San Francisco, Oakland, Berkeley and several others in the Bay Area -- to raise the price of a unit to market rate whenever a tenant moves out. It also bans cities from imposing any rent caps on units built after February 1995.

Advocates for repealing Costa-Hawkins say California cities with tight housing markets need more tools to limit soaring rents. They said they will turn in more than 565,000 signatures on Monday for the Affordable Housing Act, as their initiative is called. Once advocates submit the petitions, the secretary of state will have a month to determine whether they contain the 365,880 valid signatures of registered voters needed to put the measure on the November ballot.

``We feel confident we will qualify,'' said Amy Schur, statewide campaign director for the Alliance for Community Empowerment, one of the groups behind the initiative.

Schur said she feels just as confident that the initiative will win voter approval in November, despite the deep pockets of the California Apartment Association and other opponents. Her group is largely bankrolled by Los Angeles activist Michael Weinstein, president of the $1.3 billion nonprofit AIDS Healthcare Foundation, which has poured millions into previous ballot measures.

``We expect to be outspent,'' Schur said. ``There is no doubt about that. But we have the voters on our side.''

Supporters say that because Costa-Hawkins allows landlords to raise rents to market rates when tenants move out, many rent-controlled units are now unaffordable to anyone but the wealthy.

In Berkeley, the median rent for a new tenant is $3,500 a month, according to the real estate website Zillow. A studio in San Francisco costs on average $2,500 a month, while the average price of all apartment rentals in March was $3,433, according to data from RentCafe.

In Sacramento, where groups are pushing for local rent control, prices increased 7.2 percent year-over-year, with the average rent hitting $1,300 per month.

``We need more housing that is affordable to be built,'' Schur said. ``That is slow and expensive. In the meantime, the only policy step that will address the severe displacement crisis in the short term is the expansion of reasonable rent control. There is no other way to keep people in their homes now.''

If a repeal passes, vacancy controls would not automatically be imposed. Cities with rent control would have to decide individually. The same is true for imposing price caps on post-1995 construction.

Opponents say repealing Costa-Hawkins will scare off developers and thus freeze construction on much-needed housing. That will drive rents higher, they say.

Debra Carlton of the California Apartment Association said Costa-Hawkins was the right fix two decades ago to ``extreme rent control'' in some cities.

``New construction had come to a near-halt,'' Carlton said in January as she urged state lawmakers to reject a bill that would have done the same thing as the ballot proposal -- repeal Costa-Hawkins.

That bill died in its first committee vote, after an emotional hearing before hundreds of tenants and landlords. When the measure was defeated by a single vote, dozens of people who supported the repeal rushed the front of the hearing room, chanting pro-rent control slogans.

Assemblyman David Chiu, D-San Francisco, who co-authored the bill, said he still believes a legislative fix is better than the all-or-nothing approach of a ballot measure to repeal and replace Costa-Hawkins.

``Tenants are suffering tremendously during this housing crisis, and many are one rent payment away from eviction,'' Chiu said. ``Tenants desperately need help. There is still time to do something in the Legislature, if there is the will.''

The California Apartment Association, business and real estate groups -- all of which came out in force against Chiu's bill -- are expected to spend big to fight the ballot proposal.

``Our job will be to educate voters that this will pour gasoline on the housing crisis by freezing construction of new housing,'' said Steve Maviglio, a spokesman for Californians for Responsible Housing, the opposition campaign.

Maviglio said the campaign expects proponents to spend ``upwards of $30 million'' and that they are prepared to more than match that.

If the measure qualifies, ``it's going to be a heated campaign and one of the most controversial on the ballot, which results in it being more expensive,'' Maviglio said.