Californians Overwhelmingly Vote Against Rent Control Proposal

Unofficial election results show that California voters turned down Proposition 33, which aimed to grant cities and counties the authority to regulate residential rents. On the other hand, voters in the Golden State approved Proposition 34, a measure critics describe as targeting one of the sponsors of the rent control proposal.

Proposition 33, also known as the Justice for Renters Act, sought to prevent the state from constraining the types of rent control laws implemented by cities and counties.

It would have also eliminated the Costa-Hawkins Rental Housing Act, a current law that prohibits rent control on single-family dwellings, condos, and new housing built after February 1, 1995. Costa-Hawkins also prohibits “vacancy control,” which limits an owner’s ability to raise rent for new tenants.

Preliminary results from California’s secretary of state as of November 15 show that Prop. 33 is falling short by nearly 3 million votes, with slightly over 60 percent of voters against it.

Michael Weinstein, president of the AIDS Healthcare Foundation, expressed disappointment with the outcome.

“Housing is and will remain a human rights issue,” he said in a statement to The Epoch Times. “The defeat means that billionaire corporate landlords will amass more wealth while renters will face the choice between paying rent or having food, possibly ending up on the streets.”

The nonprofit leader and political activist attributed the defeat of the proposal to heavy spending from opponents. Critiques of Prop. 33 spent over $125 million compared to around $50 million raised in support, according to California’s secretary of state data.

“The common belief in politics is that he who spends the most on propositions emerges victorious,” Weinstein explained. “That money, extracted from tenants as high rents, was used to spread falsehoods and intimidate the AIDS Healthcare Foundation and its supporters.”

Landlords typically challenge rent control measures while tenants support them, and the rules vary across different parts of California.

About 25 percent of California’s rental units fall under some form of rent control, including cities like Los Angeles, San Francisco, and San Jose, as stated by the nonpartisan Legislative Analyst’s Office.

State law limits rent hikes to 5 percent plus the change in the cost of living, up to 10 percent annually.

If the measure had passed, analysts predict effects like lower rents for some individuals in rent-controlled areas but higher rents for those not covered by rent control.

However, some rental markets could suffer as landlords sell properties, potentially decreasing the availability of homes and lowering home values, which would in turn reduce property tax revenues, affecting various budgets.

Similar propositions were presented to voters in 2018 and 2020 but ultimately met strong opposition in both instances.

Critics of Prop. 33 argued it was “deeply flawed and deceptively anti-housing” as it could deter development and investment.

Proposition 34

While Prop 33 was rejected, voters approved Proposition 34 by a narrow margin, a measure seen as targeting the AIDS Healthcare Foundation.

Supporters spent over $43 million to advocate for Prop. 34, contrasting with approximately $16 million spent by opponents.

“The results of Propositions 33 and 34 only demonstrate one thing: Spending over $170 million in misleading and confusing voters virtually ensures victory,” Weinstein commented in another statement to The Epoch Times.

Proposition 34 aims at organizations meeting specific criteria, including participation in the federal drug prescription discount program, having contracts with California’s Medi-Cal or Medicare, and spending at least $100 million on non-patient matters over a decade.

These organizations must also have at least 500 housing violations.

Entities like the AIDS Healthcare Foundation often make revenue by charging more to health care payers, including the state, for prescription drugs obtained through discount programs. They invest some of this income in real estate, such as hotels and housing in underprivileged areas.

The law mandates that organizations meeting these criteria must allocate at least 98 percent of discount drug program revenues to patient care.

Non-compliance or actions deemed “unprofessional, dishonest, or harmful to public health or safety” could result in penalties like loss of licenses and tax-exempt status for non-profit organizations. Additionally, executives could be barred from leading other health-related entities.

Prop. 34 also grants authority to the state and its agencies to negotiate lower drug prices for Medi-Cal.

Supporters argue that such negotiations can reduce prescription drug costs and potentially save taxpayers billions of dollars.

Meanwhile, critics label Prop 34 as a “revenge initiative” against the AIDS Healthcare Foundation.