California Voters Reject Rent Control Expansion

Voters in California have defeated by a wide margin a ballot question that would have enabled cities to significantly expand rent control.

Proposition 33 was rejected by a margin of 61.6% to 38.4%, the San Francisco Chronicle reported on Wednesday morning.

Prop. 33 would have repealed the Costa-Hawkins Rental Housing Act, a three-decade-old state law that prohibits cities from establishing rent control over all single-family homes and housing units built after 1995. The measure also would have allowed cities to implement “vacancy control” of units when tenants vacate rent-controlled units. Under Costa-Hawkins, the law permits landlords to establish initial rental rents for new tenants.

Prop. 33, called the Justice for Renters Act, said “the state may not limit the right of any city, county, or city and county to maintain, enact or expand residential rent control.”

The tenant rights group Housing is a Human Right and its parent organization, the AIDS Healthcare Foundation, collected more than 800,000 signatures last year to put the issue on the November 2024 ballot.

Two other ballot initiatives to lift statewide rent control restrictions were defeated in 2018 and 2020 by wide margins. Supporters of Prop. 33 were hoping the third time would be the charm, but when all the votes are counted, Tuesday’s result is likely to be the largest defeat for the measure.

More than 30 cities in California already place some limits on rent increases, with caps ranging from 3% to 10% annually for covered units, with some of the increases pegged to the inflation rate.

The San Francisco Board of Supervisors last month approved an ordinance expanding rent control to an additional 16,000 apartments in the city—an ordinance that won’t go into effect now that statewide voters have rejected Prop. 33.

The bill would have moved the city’s rent control cutoff date to 1994 from 1979. The Costa-Hawkins law prohibits local governments from amending rent control ordinances on units constructed after February 1995 or back-dated to when the locality passed its ordinance—which in San Francisco was enacted in 1979.

Last month, the Los Angeles City Council passed a resolution endorsing Prop. 33.

“It’s completely arbitrary that we can create rent control for buildings from 1978, but we can’t do it for 1980. Every year we continue to lose more of our rent-stabilized housing,” said Hugo Soto-Martinez, a council member who authored the resolution supporting Prop. 33, CalMatters reported.

The Los Angeles Times published an editorial opposing Prop. 33.  “We support rent control, and endorsed two previous initiatives that would have repealed or amended Costa-Hawkins,” the editorial said.  “Proposition 33 goes too far. It includes sweeping language that could make California’s housing shortage even worse by prohibiting the state from imposing any limits on rent controls set by cities and counties in the future. Voters should reject Proposition 33.”

Proponents of Prop. 33 were outgunned by real estate interests opposing the measure in ad campaigns this year by a three-to-one margin, the San Francisco Chronicle reported.

As of mid-October, the No on 33 campaign had raised a total of $120M to fund ads across television channels and podcasts, including $83M from the California Apartment Association and $19M from the California Association of Realtors. The Yes on 33 campaign raised $43M, the report said.