At first glance, it might seem easy for any Alamedan who identifies herself as a “progressive” to decide to back Proposition 10, which would repeal the Costa-Hawkins Act and permit cities to enact rent-control ordinances covering all rental properties within their jurisdiction.
After all, the California Democratic Party, with 95 percent of its executive board voting in favor, recently endorsed the proposition. The ACLU, numerous public-employee unions, and multiple chapters of the Democratic Socialists of America all support it. And, although he didn’t write the initiative, our own State Assemblyman Rob Bonta previously co-authored a bill – which didn’t make it out of committee – to accomplish the same result.
At the same time, the opponents of Proposition 10 consist of the usual aggregation of villains: the California Republican Party, the state Chamber of Commerce, the California Association of Realtors, the California Apartment Association, the state N.A.A.C.P., and Lieutenant Governor Gavin Newsom.
So, plainly, every enlightened Alamedan ought to vote . . . hey, wait a minute: Did we just say that the state’s leading civil-rights organization and the Democratic candidate for Governor oppose Proposition 10?
Yes, we did, and, yes, they do.
What is especially intriguing is that the reasons offered by the N.A.A.C.P. and Mr. Newsom for opposing the repeal initiative are strikingly similar to those advanced by the hated landlords, who emphasize the potential negative effect of rent control on the supply of housing.
“It will make affordable rental housing even more scarce than it is today, widening the gap between our state’s haves and have-nots,” California N.A.A.C.P. President Alice Huffman was quoted as saying after the organization announced its opposition to Proposition 10. “We need to increase the availability of affordable housing targeted to those most in need – but this initiative is the wrong approach that will only make the problem worse.”
Mr. Newsom originally was more circumspect, telling the 2018 California Housing Conference in March that, “Getting rid of these protections [provided by Costa-Hawkins] overall may have unintended consequences in terms of housing production that could be profoundly problematic.” More recently, both the Los Angeles Times and KQED reported that the Democratic gubernatorial candidate “opposes” or “is opposed to” the repeal initiative.
We doubt that someone slipped a copy of the landlords’ talking points in front of Ms. Huffman or Mr. Newsom when they made their statements. But they weren’t just winging it. In fact, a recent study by two Stanford professors (and a doctoral candidate) backs up the stated concerns.
The study examined the effects on tenants and landlords of the rent control initiative passed by San Francisco voters in 1994. It concluded that landlords “actively respond to the imposition of rent control by converting their properties to condos and TICs or by redeveloping the building in such as a way as to exempt it from the regulations.” The result was a 15 percent reduction in the supply of available rental housing. Moreover, average rents were seven percent higher than they otherwise would have been. The study found that all renters collectively had suffered $5 billion in losses “due to rent control’s effect on decreasing the rental housing [supply] and raising market rents.”
One of the study’s authors, assistant professor of economics Rebecca Diamond, put this conclusion more bluntly in an interview with CityLab. Rent control had a “counterproductive” effect, she said. “It just dramatically limited the supply of rental housing. On top of that, it pushed landlords to supply owner-occupied housing and new housing – both of which are really the types of housing consumed by rich people.” She added, “So we’re creating a policy that tells landlords, ‘It’s much more profitable to cater to high-income housing taste than low-income housing tastes.’”
We don’t claim to be the first to notice this split among “progressives” over Proposition 10 specifically and rent control generally. Indeed, KQED titled its analysis, “Rent Control: Will It Divide Democrats?” But our focus, as always, is on Alameda.
The City of Alameda Democratic Club has not taken a position on Proposition 10. But its long-time treasurer, former School Board member Mike McMahon, told us that, “If the City of Alameda Democratic Club places any ads for Statewide ballot measures, it would list the California Democratic Party position in the ad.” And, of course, the state party’s executive board voted overwhelmingly last month to endorse the repeal initiative.
Moreover, the co-president of the local Club, Gabrielle Dolphin, already has made her own views well-known.
Ms. Dolphin attended the committee hearing on the bill co-authored by Assemblyman Bonta and then published an “open letter” alleging that the “vast majority of those bussed to the hearing at the Capitol by the California Apartment Association and Realtors lobby were those representing a wave of investors from China yelling ‘No, no, no!’” It was Alamedans’ “civic and human duty,” she wrote, to “protect those lined up as fodder for the out-of-control real estate and property management interests, much of which (it is clear from Sacramento) comes from overseas by those with no commitment to what we in America (Alameda) claim to be our strength and beacon of hope: we are champions of human (not market) rights . . . or are we?”
Presumably, Ms. Dolphin will make a similar argument when the Club decides whether to endorse or oppose Proposition 10 or other measures on the November ballot.
What about our local housing advocates?
Rather than assume that they all support the repeal initiative, we sent emails to representatives of Renewed Hope, the Alameda Home Team, and the Alameda Renters’ Coalition.
Laura Thomas of Renewed Hope responded that the organization had not yet taken a position on Proposition 10 but she intended to put the item on the group’s agenda. We didn’t hear back from Patricia Young of the Alameda Home Team or Eric Strimling of ARC, but we found an article by Mr. Strimling on the ARC website reporting, with approbation, the endorsement of the proposition by Tenants Together, the statewide renters’ advocacy group.
Now for the hortatory part of this piece.
To our readers who care about the rental situation in Alameda, we offer two suggestions – and make one request.
First, don’t get your all of your information about Proposition 10 from Facebook or Twitter (or any predictably partisan source). Instead, read the introduction and conclusion – that way, you’ll be able to skip the math – in the study done by the Stanford professors, and the rebuttal written by the executive director and the communications and development coordinator of Tenants Together, who assert that the Stanford study is “at best ill-informed and at worst flat-out biased.” (If that’s too much homework, check out the article by CityLab summarizing the study and the release by Tenants Together outlining the rebuttal.) Then, based on the evidence and arguments you deem most compelling, make up your own mind.
(For our part, being suckers for research by economists even if we can’t parse the formulas, we found the Stanford study persuasive. It seems to us entirely rational for landlords, faced with the limits on return on investment created by rent control, to take existing rental properties off the market, and for developers, faced with the lower market value of apartment projects subject to rent control, to focus on building high-end complexes. The data appears to confirm that this kind of rational behavior in fact occurred, with the resulting negative impact on housing supply and affordability. Moreover, we think the study’s ultimate prescription is a sensible one: “If society desires to provide social insurance against rent increases, it would be more desirable to offer this subsidy in the form of a government subsidy or tax credit. This would remove landlords’ incentives to decrease the housing supply and could provide household[s] with the insurance they desire.”)
Second, if you go to any of the candidate forums this fall, ask the mayoral and council contenders to state, specifically, their position on Proposition 10 and rent control. Don’t let them get away with claiming that voting in favor of the proposition isn’t the same as voting to impose rent control because a city still must enact its own rent-control ordinance if the ballot measure passes. Unless you believe that rent control is a good idea, there’s no point in repealing Costa-Hawkins in order to enable a city to apply the restrictions more widely.
Moreover, if the candidate seems to be simply spouting slogans crafted to cater to one interest group or another, call her (or him) out. Ask anyone supporting Proposition 10 why the Stanford study is wrong in its conclusion about the detrimental effect of rent control on housing supply and affordability. Or ask anyone opposing the repeal initiative what alternative legislative actions Council should take to make rents more affordable by lower-income households.
Finally, let’s knock off the name-calling.
According to an article in the East Bay Express, an audience member at a public meeting last month denounced Vice Mayor Malia Vella as a “union whore.” This was bad enough, but it set off a spate of opinion pieces suggesting that Ms. Vella’s critics were motivated by racism (as distinguished from distrust of her ties to organized labor) because she is, according to Alameda Magazine, a “mixed-race Filipina.” Yet the polemicists leveling this charge are prominent among those who delight in demeaning former Councilman Tony Daysog, who is also of Filipino heritage. Imagine their outrage if they were accused of ethnic bias based on their treatment of Mr. Daysog!
Perhaps the divergence of opinion over rent control among groups and individuals with impeccable “progressive” credentials can teach us all a lesson. Does anyone truly believe that the N.A.A.C.P. and Gavin Newsom are evil because they oppose repealing Costa-Hawkins? If not, there’s no reason to demonize anyone else who takes the same stance as they do on this issue. And – news flash – it’s not only “progressives” who can offer a non-conforming opinion in good faith – and who deserve a hearing rather than a harangue in response.
For a good summary of Prop. 10 and its background, check out the article in Ballotpedia.
Stanford rent-control study: Stanford study re rent control
Tenants Together rebuttal: Tenants Together response to Stanford study