Lessons From Rent Control's Latest Election Rejection

Liam Dillon performs a post-mortem on Proposition 21, a ballot initiative that would have implemented rent control statewide, but failed by a decisive margin to win voters in the state of California.

Proposition 21 was intended to be a more palatable version of Proposition 10, which also failed with California voters in 2018, but the changes weren't enough to win over the state's liberal voting base. As noted by Dillon, neither Proposition 21 nor Proposition 10 would have actually implemented rent control. "Instead, both initiatives would have done away with or changed current statewide prohibitions on most strict versions of rent control, which would have allowed cities and counties to pass their own measures later on," writes Dillon. So, the ballot initiatives would have removed the state preemption on rent control laws, granting  cities control to determine their own, tailored version of rent control.

As for why Proposition 21 followed in Proposition 10's footsteps, Dillon collects responses from both supporters and opponents of the proposition for lessons in why rent control is so hard for a liberal state's voters to get behind. Here's Dillon's summary of the political headwinds facing rent control in the state:

Landlord groups significantly outspent the measures’ advocates, allowing the campaigns against the initiatives to hammer home with voters potential problems with rent control. And Democratic politicians and traditionally left-leaning interest groups such as labor unions have been split on the issue. Notably, Gov. Gavin Newsom didn’t support either rent control initiative, arguing this year that Proposition 21 would hurt the supply of affordable housing and detract from already available tenant protections.

According to experts cited in the article, outspending your opponents is a formula for success in the state's ballot initiatives process (see also: Uber, Lyft, and DoorDash's big victory on Proposition 22 during the same election).

But rent control opponents also have research to call on that rent control reduces the market incentives to develop new housing supply, leading to overall decline in affordable housing while protecting affordable housing for some residents.

Dillon also notes that despite these setbacks at the ballot box, the state has legislated new tenant protections in recent years, like a law signed by Gov. Newsom in 2019 that "caps annual rent increases at 5% plus inflation in most rental housing more than 15 years old, a bid to eliminate massive rent hikes that have forced people from their homes," according to Dillon.