California Rent Control Initiative Supporters, Opponents Sought Deal To Avoid Ballot Fight — But Failed

After negotiations failed to reach a deal to avoid a costly campaign this fall, Californians are set to vote on whether to repeal the state law that limits local rent control ordinances known as “Costa-Hawkins.”

The initiative’s supporters and opponents filled the Capitol on Thursday for a legislative hearing on the measure.

Although each side includes groups spoiling for a fight, each coalition also has members who sought a compromise — in fact, they used identical words in explaining why they’d rather not slug it out at the ballot box.

“Campaigns are very expensive and unpredictable,” said Rand Martin, a lobbyist for one of the initiative proponents, Michael Weinstein with the AIDS Healthcare Foundation.

“It’s expensive and it’s unpredictable,” said Debra Carlton of the California Apartment Association, which opposes the measure.

So they tried to reach a deal.

They sat down with Sen. Bob Hertzberg (D-Van Nuys) multiple times in late May, even reaching a nondisclosure agreement to avoid having the sensitive negotiations implode amid public disclosure.

Among the options on the table: a cap on rent increases in cities that already had rent control — for all units, not just those under rent control. And tax incentives to encourage more construction.

Cities began adopting rent control ordinances in the 1970s and ’80s. According to the nonpartisan Legislative Analyst’s Office, which reviewed the proposed initiative, 14 cities had some form of rent control by the late 1980s.

That led to the Legislature enacting the law known as Costa-Hawkins in 1995. The measure prohibits local rent control rules from applying to housing first occupied after its passage, as well as to single-family homes.

Costa-Hawkins also requires local governments to allow for “vacancy decontrol,” which gives landlords the right to set rents to market rates when new tenants move in.

The initiative, bankrolled by Weinstein’s AIDS Healthcare Foundation and crafted by two Los Angeles advocacy groups — Alliance of Californians for Community Empowerment and the Eviction Defense Network — would repeal Costa-Hawkins, restoring the right of cities and counties to impose rent control on all types of housing.

Carlton said her association sought incentives for new developers and the continuation of vacancy decontrol. She also wanted a ban on rent control for single-family homes, arguing that otherwise homeowners might get out of renting.

“And I think that’s so unfortunate,” Carlton said, “because what you end up with is, tenants don’t get a rent increase; they get an eviction notice.”

Miller said his client was looking for a compromise that made meaningful reforms to Costa-Hawkins, dealt with vacancy decontrol and expedited new construction.

“We think there are ways to go that don’t require a complete repeal in order to get relief for renters,” Martin said.

He said the two sides negotiated “pretty effectively” for about two weeks. “Both sides put together some very substantive ideas about what they would support.”

But then, talks broke down.

Martin says the Apartment Association suddenly walked away without a word; Carlton says she simply couldn’t agree with what Martin offered.

And it’s now less than a week until the deadline for the initiative’s proponents to pull their measure off the ballot.

“As of today, we’re pretty far apart still,” Carlton said.

“We think it’s on to the ballot, without any question,” Martin agreed.

Hertzberg’s office confirms that negotiations have stalled.

This means voters will be left with what many business groups — and housing advocates — think are two unpalatable options this fall: ending the state’s rent control prohibitions altogether, or doing nothing.

Correction: An earlier version of the story stated that the rent control initiative was bankrolled by Michael Weinstein. In fact, the donations to the ballot measure committee that spent money to gather voter signatures came from Weinstein's AIDS Healthcare Foundation. This story has been updated.