SAN FRANCISCO — If there’s a point of universal agreement in California politics, it’s that the state’s housing crisis has spiraled to urgent proportions.

But a ballot initiative designed to tackle the prohibitive cost of housing stands to fracture Democrats here, pitting some of the state’s top elected officials against one another and placing some of the party’s most influential donors and interest groups at odds.


It’s a conflict that resonates beyond California’s borders as more and more major cities struggle to do something about the skyrocketing cost of finding a place to live. And the issue is likely to surface in the 2020 Democratic presidential primaries since it afflicts some of the biggest and most influential blue states, ranging from California to Illinois to New York.

Already, the initiative has split two prominent California politicians with national aspirations and bases in the urban hubs where the housing crunch is particularly acute: Los Angeles mayor and potential presidential contender Eric Garcetti supports the measure, saying it would restore needed local authority to address the crisis. Lt. Gov. Gavin Newsom, who has embraced an aggressive housing agenda as the front-runner to be the state’s next governor, does not.

The problem may be more acute in California, where soaring rents and a dearth of affordable homes — both of which are helping to drive one of the nation’s worst homelessness epidemics — have pushed housing to the top of the agenda.

The issue has reverberated all the way to Congress, where California Sen. Kamala Harris — herself a top 2020 Democratic prospect — earlier this month unveiled a bill to offer tax credits to renters, saying “America’s affordable housing crisis has left too many families behind.”

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In California this fall, voters will be weighing in on a ballot initiative that seeks to hold down rising costs by repealing a 25-year-old state law, the Costa-Hawkins Rental Housing Act, that sharply restricts cities’ ability to impose rent control.


Enacted with the real estate lobby's support after over a dozen cities had expanded rent control, the law barred those protections from applying to condominiums, single-family homes and new housing. That froze rent control in major cities; it's limited to properties built before October 1978 in Los Angeles and before June 1979 in San Francisco.

"Getting rid of these protections overall, I think, may have unintended consequences on housing production that could be profoundly problematic,” Newsom said at a candidate forum earlier this year.

For much of the Democratic base, Proposition 10 offers an obvious antidote to a ubiquitous problem: limiting how much landlords can jack up the rent, supporters say, will make the state more affordable and allay accelerating displacement. The California Democratic Party overwhelmingly voted to support Proposition 10 this month amid chants of “the rent is too damn high.”


“No one should have to make a decision between paying rent and buying food or health care. It’s shocking to me that there is even a debate about rent control at this point,” said Susie Shannon, a party activist who spearheaded the convention push.

“An awful lot of people think that rent control’s part of the answer to our affordable housing problem,’’ state party chair Eric Bauman said. “Amongst the activist group, the vast majority see this as a panacea.”

But that stance is running up against warnings from the housing industry that passage of the ballot measure would shrivel the already-scarce supply of rental units and discourage new building, halting recent political momentum on a possible solution. It’s an argument that powerful interest groups — including apartment owners, developers, real estate agents and construction industry unions, all of whom wield significant clout in Sacramento and have contributed heavily to Democrats — are spending millions to amplify.

“Doing away with Costa-Hawkins will limit construction — developers aren’t going to want to develop, owners aren’t going to want to build if it doesn’t make their projects pencil out,” said Ron Miller, executive secretary of the Los Angeles/Orange Counties Building and Construction Trades Council. “The way to get the prices down is supply and demand. We need to keep building.”

Research on the effects of rent control is decidedly mixed. California’s nonpartisan Legislative Analyst’s Office found a consensus that the policy keeps people in rent-controlled units but incentivizes landlords to convert rentals into condominiums or other units intended for ownership; it’s less conclusive whether rent control stymies new construction and increases rents for non-rent-controlled units.

Opponents of Prop 10 have circulated a recent Stanford University study that concluded San Francisco’s rent control laws fueled gentrification, reducing the citywide housing supply and driving up average rents. Rent control advocates say the study proves the policy works, noting it found that people in rent-controlled units paid billions less and were more likely to remain.

The research may be disputed, but the battle lines are becoming clear. Outside of the building unions, labor has been unified in support, with powerhouse groups like the California Teachers Association arguing that housing represents an existential issue for their working- and middle-class members.

“We’re facing a severe teacher shortage in California, and one of the main issues is affordable housing — for teachers being able to live in the communities where they teach,” said Eric Heins, president of the CTA. “When I lived in San Francisco, the only way I was able to afford to live there was with a rent-controlled apartment.”


That political landscape, backers of Proposition 10 say, sets up a stark choice for voters: “whether they want to side with the real estate industry on this or with a broad range of community groups,” said Dean Preston of Tenants Together, who argued the idea has gained momentum as the housing crisis has worsened.

The sense of urgency was on display earlier this year in Sacramento, when lawmakers took up a bill to repeal Costa-Hawkins. It died after a contentious hearing that saw hours of emotional testimony, with people jamming the hearing room and lining up down the hallway.

“It is, in my opinion, a conversation we can no longer avoid, and it presents an issue that is crying out for relief,” said Assemblyman Richard Bloom, who carried the bill in the Legislature, warning that the years-long construction process means new housing “will be too late for too many Californians.”

In the preceding months, lawmakers in Sacramento had debated bills that sought to expedite construction in part by limiting the tools cities and counties have to block development. A measure that would have overridden local zoning rules for construction near public transit drew national attention earlier this year as a potential model for other states struggling with exorbitant housing costs — and while the measure failed, the idea is certain to resurface.

Opponents of Prop 10 warn that the measure’s passage would halt progress toward more construction, pushing developers into wait-and-see mode.

“I think that should Prop 10 pass, then all of the efforts to try and expedite or make it easier for the development of housing, particularly affordable housing, I think you can for all intents and purposes take a breath for five years,” said Tom Bannon, CEO of the California Apartment Association.

That leaves California voters with a momentous decision to make. Kevin Reikes, who is not working on the Proposition 10 campaign but has in the past conducted polling for apartment owner and Realtor groups, predicted voters would jump at a chance to change the status quo on housing.

“People want to be able to do something,” he said, “and this will be a vehicle for the voters to do something.”


Carla Marinucci contributed to this report.