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GUEST OPINION: Rent control won’t solve housing crisis, but more construction will

Date:

Construction, housing, home, Citrus Heights
File photo, a new home under construction on Turner Court in Citrus Heights. // CH Sentinel

By Sacramento County Supervisor Sue Frost
California voters went to the polls last November and voted overwhelmingly to reject the Local Rent Control Initiative (Prop 10).  I was one of the only local elected officials in our region who was publicly outspoken in my opposition to Prop 10, and rejoiced when it was defeated. 

Apparently the issue did not die with Prop 10, because its backers are trying a “redo” in 2020 with a modified version that is just as fundamentally flawed as its predecessor. 

Sue Frost, supervisor
Sue Frost

Due to this, I want to take this opportunity to explain to you the history of rent control in California, how the 2020 version differs from the 2018 version, and why I am vehemently opposed to both versions.

Put simply, rent control is when the government tells property owners how much rent they can charge each year. Local municipalities were allowed to create any form of rent control they wanted until the state passed the Costa Hawkins Rental Housing Act in 1995, preventing rent control restrictions from applying to single-family homes, condos, or apartment buildings built after 1995.

Finding these limits too constraining, an effort was made in 2018 in the form of Prop 10 to remove the 1995 law, in a move that would have once again allowed local municipalities, like Citrus Heights, to pass strict rent control measures on new construction. 

The 2020 proposition is slightly different, in that it allows local municipalities to pass rent control on any building that was built over 15 years ago.  This means that housing constructed in 2020 could have rent control imposed on it in 2035, housing constructed in 2021 could have rent control imposed on it in 2036, and so on.

Both propositions suffer from the same misguided notion that renters are better off with more rent control.  Economists across the world, as well as anyone with a basic understanding of economics, understand that this is simply not the case. 

While rent control does help affordability in the short run for current tenants, in the long-run it decreases rent inventory and affordability, fuels gentrification, and creates blight in the surrounding neighborhood.

Rent control laws massively slow down home building, and in many cases landlords convert their properties to different uses entirely.  The laws of supply and demand would tell you that new housing construction is the key to keeping housing affordable, not rent control.  Supporters of rent control should carefully review the rent control policies in areas like San Francisco and Los Angeles, and seriously ask themselves if they would consider either of those two cities affordable.

In places where there is a demand for more housing, a more effective policy is to simply build more housing.  Instead of penalizing property owners, we should consider policies that offer tax incentives to property owners who keep rents low.  And we should consider allowing housing projects to get the same environmental exemptions that sports facilities get. 

I do not have all the answers; however, it is clear to me that we cannot continue to create policies that sound good on paper but actually make the situation significantly worse. 

Sacramento County Supervisor Sue Frost formerly served as a Citrus Heights councilwoman and currently represents District 4, which includes Citrus Heights. She will be hosting an upcoming community meeting at Citrus Heights City Hall at 6 p.m. on Sept. 16, 2019, and can be contacted at (916) 874-5491, or SupervisorFrost@saccounty.net.

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