Thoughts on Prop 10

The midterm election is coming up, and y’all gotta get out there and vote! We’ve been asked by many of our clients to explain Proposition 10 and what it would mean for rent control in Los Angeles and across CA. Let’s take a look:

What would Prop 10 do? 

Prop 10 would repeal the statewide Costa Hawkins Rental Housing Act.

OK, what is the Costa Hawkins Rental Housing Act?

You may have heard that Costa Hawkins prohibits local governments from enacting rent control laws. That is not exactly true (obviously, since LA already has wide-reaching rent control). Costa Hawkins prohibits local governments from enacting rent control on buildings constructed after 1995 as well as single family houses and condos. It also states that landlords can set the new rent at whatever price they want once tenants move out.

Why do we have Costa Hawkins anyway?

You might think this law seems random, which is why historical context is important. As I understand it, Costa Hawkins comes from decades of wildly inconsistent housing policies: too much rent control, which led to poorly maintained buildings and slummy conditions; and not enough rent control, including laws that allowed landlords massive tax breaks without requiring that they pass along any of their savings to tenants. Costa Hawkins was an attempt to meet in the middle.

Who is funding the No on 10 campaign?

Mostly Blackrock and other massively wealthy real estate companies and developers that want to stay wealthy.

Who is funding the Yes on 10 campaign?

Largely Michael Weinstein with AHF. You may know him from his “Syphilis Tsunami!” billboards. You may also remember him from his attempt to pass Measure S, which would have blocked construction of denser multi-unit buildings in LA and worsened the housing crisis. (Allegedly this measure was created to stop the construction of a high-rise that was going to block the view from his Hollywood office.)

You may also remember him from Prop 60, which would have enacted regulations on porn that primarily financially benefited Michael Weinstein.

Two Cents

In repealing Costa Hawkins, local governments would have the option to add “new” construction, condos, and single family houses–including people renting single bedrooms–into the rent control equation. This might be helpful, but it might actually create a net loss of available units as people take their condos and houses and single bedrooms and turn to Airbnb instead. It also very well might slow new construction, which is already way too slow (thanks to Trump’s tariffs, building materials are 2.5x more expensive than they were last year). I think it’s really hard to know how it will play out, but I don’t think it’s a given that it’s going to be good for tenants.

Either way, I just don’t think this is the thing that needs to change for us to have a healthy housing market.

I believe we desperately need to reform our current housing situation, and I think the way we do that is to build a whole lot more units and rethink our infrastructure. That means: 1) incentivizing those massively rich developers to build a ton of low-income housing, even if it makes them richer to do so; and 2) amending our zoning laws to allow for denser housing throughout Los Angeles, which is overwhelmingly zoned for single family houses only. Legislation on this second point has been introduced many times, but homeowners have a powerful voice, and many do not want their neighborhoods to change for the denser. Here’s a Vox article about how Tokyo’s housing costs are just fine because they keep building an adequate amount of housing for people. Imagine that!
In Conclusion…

Obviously, I am a realtor, and my livelihood is tied up in this, so maybe my perspective seems entirely self-serving. Most of my business is with normal people selling and buying homes, which is still going to go on regardless of rent control. Maybe Prop 10 would be good for the city, or maybe it’s a step in the right direction. But my gut says it’s the wrong fix–I fear it might actually end up making things worse by reducing available units and slowing construction, which would ironically inflate rent prices.

I am lucky enough to own my own home. But I worry for my friends, many of whom are renters, and I worry that disincentivizing property ownership is a bad road to go down. I have seen firsthand the kinds of deplorable conditions people live in when their landlords decide it’s not worth it to maintain their buildings (I have gotten fleas twice, black mold, the works) and I fear that it’s a possible direction we might take again depending on what the city decides to do in the absence of Costa Hawkins.
Lexi Newman, Inc

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