CommentsHOUSING POLITICS--In analyzing Proposition 21 earlier this year, California’s nonpartisan independent Legislative Analyst’s Office (LAO) noted that the anti-housing initiative could result in a decline in property values for homeowners and impact renters as well.
Now, another survey by respected Sacramento-based Capitol Matrix Consulting points to even more devastating impacts from Prop 21 for both renters and homeowners.
The firm, headed by two legislative long-time fiscal experts (one Democrat and one Republican), concluded if Prop 21 passes it “will result in less new construction, less maintenance and investments in upkeep of existing units, a drop in property values, and ultimately a marked deterioration of neighborhoods where it is applied.”
Among the study’s findings:
- Prop 21 would reduce property values by about 20 percent in the long-run;
- It would reduce the incentive to build rental units;
- It will discourage maintenance, repairs and renovations of rental units;
- It would have “devastating effects” on “mom and pop” property owners who account for about 80% of single-family home rentals;
- It would reduce economic output by $3.5 billion and cost California at least 23,000 jobs;
- It would potentially hurt the state’s CalPERS and CalSTRS retirement systems by reducing the value of real estate investments;
- It would cost governments up to $1.5 billion in revenues, affecting education and other government services; and
- It will encourage condo conversions, as rental units would be changed to condos, thus decreasing the supply of affordable housing.
Prop 21 “explicitly authorizes a draconian form of rent control that includes vacancy control, unlimited authority to local governments to roll back rents and eventual controls on newly constructed units,” the study notes.
Capitol Matrix also noted that the most far-reaching impacts for Prop 21 will result in a “housing freeze” for the state at a time when affordable housing is needed more than ever. Investments in new affordable housing under the limits of the measure would be halted because they would not pencil out financially.
Meanwhile, existing renters also would be hurt. “The measure would result in all the same negative impacts on maintenance and property values as the strongest forms of rent control…all of which have been reformed out of existence in the US in light of their devastating impacts on rental housing and the neighborhoods in which they are located.”
Proposition 21 is opposed by the state’s leading affordable housing groups as well as Governor Newsom, labor, seniors, and veterans’ groups, as well as nearly all the state’s major newspapers. It is being financed with more than $22 million from “nonprofit” landlord Michael Weinstein of AHF, who was recently exposed as a “slumlord” by the Los Angeles Times.
A recent IGS poll showed only 37 percent support for Prop 21. Weinstein’s similar measure, Proposition 10 in 2018, was defeated overwhelmingly, as have his other ballot measures in California, Ohio and other states.
(Steven Maviglio is the spokesperson for Californians for Responsible Housing. Views expressed here do not necessarily reflect those of CityWatch or other writers and contributors.)
-cw