Despite Rhetoric from Special Interests, Costa-Hawkins Failed to Solve Housing Crisis

Nov 1, 2018

The year was 1995. As Apollo 13 was on top at the box office and TLC’s “Waterfalls” dominated the charts, lawmakers in Sacramento ushered in an ill-conceived bill that has only further inflamed California’s housing crisis in the 23 years since its passage. The bill stripped local communities of the power to even consider new measures to stabilize rents and limit skyrocketing rent increases.

Passed by just one vote, Costa-Hawkins was shepherded through the legislature by big Real Estate special interests and Republican Governor Pete Wilson. Proponents at the time made baseless, outsized claims that fail to match reality — just as the backers of No on 10 make today:

  • 1995: Then-State Senator Jim Costa: the bill will “create a positive business climate for the construction of rental housing throughout this state.” [Los Angeles Times, 7/25/95]

    • TODAY: “With a current deficit of 2 million housing units, the state needs 1.8 million units by 2025 just to meet its projected population and household growth.” [California Department of Housing & Community Development, Feb. 2018]
      California ranks 49th in number of housing units per capita. [SF Business Times, 3/26/18]
      Passing Prop 10, which repeals Costa-Hawkins, will “serve as a powerful complement to a statewide strategy to increase our housing supply, while also providing relief to renters who need it the most.” [Los Angeles Times, 10/31/18]

Just as Proposition 10 supporters note today, the writing was on the wall about Costa-Hawkins’ expected detrimental impact on the housing market back in 1995:

  • 1995: Then-State Senator Tom Hayden: “For those of you who have long argued that Santa Monica is more or less a yuppie city because of rent controls, consider what will happen if you eliminate rent controls. Then it will be 100% affluent enclaves.” [Los Angeles Times, 7/25/95]

    • 1995: Median rent for a two-bedroom in Santa Monica — $1,143
      TODAY: Median rent for a two-bedroom in Santa Monica — $2,505
  • 1995: Santa Monica Rent Board Commissioner Lisa Monk Borrino: “[Costa-Hawkins] puts a price on tenants’ heads. . . . Housing should be a right, not a privilege, and they’ve turned it into a privilege and not a right.” [Los Angeles Times, 7/25/95]

    • TODAY: California has the highest poverty rate in the country due to its housing crisis. [NPR, 9/27/18]

  • 1995: Then-State Senator Quentin Kopp: Costa-Hawkins is “[Just] another example of this Legislature preempting local control, and I thought this was the era of local control.” [Los Angeles Times, 7/25/95]

    • TODAY: “City councils and boards of supervisors clearly understand the needs of their constituents best,… they deserve the freedom to experiment — responsibly — with creative ways to help vulnerable tenants and energize the housing market.” [Sacramento Bee, 9/14/18]

In just five days, California voters will have a critical opportunity to course correct and take our state off of the dangerous path we’re on in terms of housing affordability. California is number one in the nation for homelessness, has the most expensive metro areas in the nation, and more than half of Californians spend over a third of their income on housing. By passing Proposition 10, we can take key step towards solving California’s housing-affordability and homelessness crises.

Prop 10 will protect California’s renters and guarantee landlords a fair rate of return, all while laying the foundation for stronger communities. By empowering local communities to limit rent increases and curtail predatory housing practices, cities and counties will be able to create thoughtful laws to address their local housing situations. That’s why more than 500 trusted organizations and civic leaders endorse Proposition 10, including U.S. Senator Bernie Sanders, the California Democratic Party, the California Labor Federation, the ACLU, and the League of Women Voters.

ABOUT PROPOSITION 10: Proposition 10, the Affordable Housing Act, is a ballot measure that will restore the right of local communities to set fair limits on rent increases in order to address California’s housing affordability crisis.

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