Rent control has worsened the housing crisis, so California Gov. wants to expand it statewide.

As I have posted often, the only law that is truly sacred in California is the one related to unintended consequences.

We have chronicled the continuing homelessness crisis in California and its severe public health consequences.

Now, in a deal touted to protect renters from being priced out of their rentals, California Governor Gavin Newsom and top Sacramento lawmakers have stuck a deal to create a state-wide rent “cap.”

The deal, which needs the approval of the Legislature in the next two weeks, would cap rent increases statewide at 5% plus inflation per year for the next decade, according to Newsom’s office. The legislation, Assembly Bill 1482, would also include a provision to prevent some evictions without landlords first providing a reason. ..The agreement represents a dramatic shift in the debate over whether tenants would see any new limits on rent increases this year, and represents a political risk for Newsom as he backs a highly visible bill not assured of passage.

Theoretically, a “rent cap” is different than “rent control.” However, the terminology change seems to be a political stunt to get around the fact that a rent control measure was soundly defeated in the November 2018 election.

The plan has the rent caps terminating in 2030. The cost of inflation would be adjusted regionally, so there likely would be a different percentage in San Francisco than in the less prosperous Central Valley.

The California Apartment Association and other state-wide organizations indicate that they will not oppose the bill.

“Now we must get serious about moving forward on production, which is the only way we address our housing crisis,” Debra Carlton, senior vice president for public affairs, said in an email. The California Building Industry Association is also neutral on the bill, Newsom’s office said. “The bill will protect millions of renters from rent-gouging and evictions and build on the Legislature’s work this year to address our broader housing crisis,” Newsom, Chiu, and legislative leaders say in a statement.

Unless California ends burdensome requirements on construction and permitting, it is difficult to see how the rent “caps” won’t create the same kind of unintended consequences as rent “controls.”

Stanford University, hardly the bastion of conservative thinking, conducted a detailed study that show rent controls just don’t work.

“Taken together, we see rent controlled increased property investment, demolition and reconstruction of new buildings, conversion to owner occupied housing and a decline of the number of renters per building. All of these responses lead to a housing stock which caters to higher income individuals. Rent control has actually fueled the gentrification of San Francisco, the exact opposite of the policy’s intended goal.” That’s quite the indictment of a policy long-favored by tenant advocates and politicians who expressly claim that rent control is the only way to ensure housing affordability and to prevent gentrification….

Furthermore, rent control activists are going to try to pass another measure in 2020 despite the defeat last year. Additionally, in a move that seems to suggest the politicians already know the “cap” is full of fail, Sacramento is fully embracing the concept of tent city living.

As homeless men, women and children in Sacramento wait for three new large shelters to open, another model that local officials have repeatedly rejected over the years is now quickly gaining traction. The “safe ground” model – essentially creating an area where homeless people can live safely in tent cities or in cars – has not been a part of Mayor Darrell Steinberg’s homeless plan. Steinberg has instead been pushing hard for large shelters with rehousing services. But as the city enters its fifth month without a city-run shelter, other alternatives are now coming to the fore. Councilman Jeff Harris was previously opposed to the “safe ground” model, along with most of the council aside from Councilman Allen Warren. Now, Harris is proposing the city open a temporary homeless camp similar to one Modesto and Stanislaus County opened earlier this year. “To get from today until we stand up more shelter beds, which we desperately need, I suggest we take a look at the safe ground model,” Harris said.

Maybe we can all those tent cities “Newsomvilles”!

If you are planning to visit the Golden State, make sure you are up-to-date on your vaccinations and watch where you step.



