Why You Should Vote No on California Proposition 33, Prohibit State Limitations on Local Rent Control Initiative (2024)

As Californians prepare to vote on various propositions in the 2024 election, one measure that is drawing significant attention is Proposition 33, which aims to overturn more than 100 state housing laws and weaken the strongest statewide rent stability law in the nation. This would open the door to permanent price controls, even on single-family homes and condominiums. At first glance, the idea of expanding rent control may seem like a straightforward solution to California’s housing crisis. However, a closer look reveals several reasons why voting no on Proposition 33 is the right decision.

 

  1. Rent Control Does Not Solve the Housing Crisis

One of the main arguments in favor of Proposition 33 is that rent control will protect tenants from rising rents. While this may sound appealing, rent control does little to address the root cause of California’s housing crisis: the lack of affordable housing supply.

Restricting how much landlords can charge might provide temporary relief for some tenants, but it discourages investment in new housing and leads to a long-term decrease in available rental units. Landlords may convert rental properties into condos or other types of housing that are not subject to rent control, exacerbating the shortage of affordable rentals. If we truly want to solve California’s housing crisis, we need to focus on building more housing, not adding restrictive policies that deter investment.

 

  1. Reduces Incentives for New Construction

Rent control has historically led to reduced incentives for developers to build new rental housing. Under Proposition 33, local governments would have more freedom to impose or expand rent control, potentially making it more difficult for developers to justify the high costs of construction. 

California already has some of the highest construction costs in the country, and rent control would only add another layer of uncertainty. With less financial incentive to build, developers may turn to other states or choose to build fewer housing units, further restricting California’s already limited housing supply. In the long term, this will hurt renters, as fewer rental units mean more competition for available housing and potentially higher rents for those units that are not under rent control.

 

  1. Negative Impact on Small Landlords

While large corporate landlords often have the financial means to absorb the costs of rent control, small, “mom-and-pop” landlords may not be able to do so. Many smaller landlords depend on rental income to pay their mortgages, maintain properties, and cover expenses. If they are unable to raise rents to keep up with inflation, property taxes, or maintenance costs, these landlords may be forced to sell their properties or neglect maintenance.

This could lead to a decline in the quality of housing stock, as landlords struggle to keep up with repairs and upkeep, potentially harming tenants in the process. Proposition 33 could disproportionately hurt small landlords who play an essential role in providing housing to Californians.

 

  1. Rent Control Favors Existing Tenants at the Expense of New Renters

Proposition 33’s rent control policies may provide some protections to existing tenants, but it can have unintended consequences for new renters. When rent control is implemented, landlords are less likely to make units available to new tenants and may favor tenants who they perceive as less risky. This can lead to housing discrimination, where landlords avoid renting to people who they believe might not be long-term tenants.

Furthermore, rent control creates an imbalance in the market, where long-term tenants benefit from below-market rates, while new renters face higher rents for the few available units. This dynamic exacerbates the housing crisis by making it even more difficult for new renters—especially younger individuals and those moving to California for work—to find affordable housing.

While Proposition 33 may seem like a quick fix for California’s housing affordability problems, it ultimately creates more problems than it solves. By discouraging new construction, reducing incentives for landlords to maintain properties, and distorting the rental market, rent control will only worsen the state’s housing crisis in the long term.

The real solution to California’s housing challenges lies in increasing the supply of affordable housing, encouraging responsible development, and offering targeted assistance to those who need it most. For these reasons, voting no on Proposition 33 is the right choice for a better future in California and your real estate investment.

How Rent Control Measures Like Prop 33 Harm California’s Housing Supply

Rent control has been a heavily debated topic in California for decades, and with Proposition 33 on the ballot this November, the debate is more critical than ever. While rent control is often seen as a short-term solution to skyrocketing rents, it brings with it long-term consequences that can seriously damage the housing market. In this blog, we’ll break down how rent control, like that proposed under Prop 33, could lead to a shortage of available housing and make the crisis in California even worse.

 

Understanding the Housing Supply Crisis  

California is already facing a well-documented housing shortage. The state needs to build millions of new homes to meet the current demand, but local regulations, high costs, and restrictive development laws have slowed construction. Adding rent control into this mix could make the problem significantly worse. Rent control discourages property owners from investing in new developments, and with Proposition 33 threatening to expand rent control to all types of housing, this could seriously harm the construction of new housing units across the state.

 

How Rent Control Affects Housing Supply

While rent control policies are often seen as a way to help tenants, they typically result in a reduction of available housing in the long run. Here’s how:

  1. Disincentivizing New Construction: Developers are less likely to invest in new housing projects when they know that future rents may be tightly controlled. This reduces the number of new homes and apartments being built.
  2. Lack of Maintenance & Upgrades: Property owners under rent control may lack the financial incentive to maintain or upgrade properties, leading to a decline in housing quality.
  3. Vacancy Control Restrictions: If Prop 33 passes, it could enable strict vacancy control, meaning landlords would not be able to adjust rents to market rates when tenants vacate. This locks rental prices at artificially low levels and discourages investment in improving or expanding rental units.

 

Case Studies from Rent-Controlled Cities

Cities like San Francisco and New York have long histories of rent control policies, and both cities are facing housing shortages. In San Francisco, rent control has led to fewer rental properties being available, as landlords convert rental units into other forms of housing or choose to sell. In New York, tight rent control measures have caused similar issues, with property owners reluctant to invest in new rental properties, leading to fewer affordable housing options for tenants.

 

Why Prop 33 is a Step Backwards for California

By expanding rent control to all types of housing, including new developments and single-family homes, Prop 33 would further reduce the incentive for developers and property owners to build or maintain housing units. While rent control may seem like a solution to rising rents, it ultimately exacerbates the housing crisis by reducing the supply of rental housing. 

 

Expanding rent control is a temporary fix to a long-term problem. Instead, California should focus on building more affordable housing, reducing the regulatory burden for developers, and encouraging investment in new construction projects.

 

Vote NO on Prop 33 to Protect Housing Supply  

The most effective way to tackle California’s housing crisis is to encourage the building of more homes, not to stifle development with outdated rent control policies. Proposition 33 threatens to worsen the housing shortage by reducing the financial incentive for property owners to develop or maintain rental properties.

For further insights and regular updates on how to protect your property investments and the future of housing in California, follow us and stay informed about the latest trends and legal changes in California’s housing market.

How Prop 33 Will Impact Property Owners in California

As we continue to explore the potential consequences of Proposition 33, it’s essential to understand exactly how this measure will affect property owners across California. Whether you own a single-family home, a multi-family apartment building, or you’re an investor in the state’s rental housing market, the passage of Prop 33 would significantly alter your ability to manage and profit from your properties.

In this post, we’ll break down the key ways Prop 33 could hurt property owners and why voting NO this November is critical to preserving the balance in California’s housing market.

 

  1. Expansion of Rent Control to All Properties

Currently, under the Costa-Hawkins Rental Housing Act, single-family homes and properties built after 1995 are exempt from rent control. If Prop 33 passes, rent control could be expanded to include these properties, removing a vital safeguard that allows property owners to adjust rent based on market conditions.

– How this impacts you: If you own a single-family home, you could be subject to strict rent control regulations, limiting your ability to raise rent to meet the rising costs of maintenance, property taxes, and general upkeep.

 

  1. The End of Vacancy Decontrol

Under the current law, when a tenant moves out, landlords have the freedom to set the rent for new tenants at market rates. This process, called vacancy decontrol, is one of the most important protections for property owners, allowing them to adjust rents to keep pace with inflation and market demand.

Proposition 33 would eliminate vacancy decontrol, locking property owners into low rent rates indefinitely, regardless of tenant turnover. This means that even when a long-term tenant moves out, you won’t be able to reset the rent to match  market rates, even if your costs have increased significantly over time.

– How this impacts you: You lose the ability to respond to market fluctuations, making it harder to cover property expenses and invest in property improvements. Over time, this could lead to financial strain and a lack of funds for essential maintenance.

 

  1. Reduced Property Values

One of the unintended consequences of expanding rent control is the impact it has on property values. Historically, properties subject to rent control tend to see a reduction in their overall market value due to the limitations on income potential. If Prop 33 passes and rent control is expanded, we can expect to see a sharp decline in the value of rental properties throughout the state.

– How this impacts you: If you’re a real estate investor or a property owner looking to sell your property, lower property values will reduce your ability to profit from your investment. For property owners who depend on rental income for retirement or long-term financial security, this reduction in value could be devastating.

 

  1. Discouraging New Housing Development

At a time when California is facing a severe housing crisis, the expansion of rent control would further discourage the development of new housing units. Property developers and investors would be far less likely to build new rental properties if they know they’ll be subject to price controls that limit their return on investment.

– How this impacts you: Fewer new housing developments mean fewer opportunities for real estate investment and fewer rental units available on the market. This could lead to increased competition among tenants for existing units, further destabilizing the housing market.

 

  1. Increased Maintenance and Compliance Costs

While rent control keeps rents artificially low, property owners are still responsible for the costs associated with property maintenance, repairs, and ensuring that buildings meet all local codes and regulations. With Prop 33 in place, you may find yourself unable to raise rents to cover the rising costs of these necessary services, leading to financial strain and a reduced ability to keep properties in good condition.

– How this impacts you: Without the ability to adjust rents, property owners could struggle to cover the rising costs of repairs, utilities, and property management, potentially leading to deferred maintenance and a decrease in the quality of rental housing.

 

Why Property Owners Should Vote NO on Prop 33

For property owners across California, Proposition 33 represents a significant threat to rental income, property values, and investment potential. By removing the protections offered by the Costa-Hawkins Rental Housing Act, Prop 33 would create a more restrictive and less profitable environment for landlords, while doing little to solve California’s ongoing housing crisis.

If you’re a real estate investor, a landlord, or someone who depends on rental income, voting NO on Prop 33 is essential to protecting your ability to manage your property effectively and maintain its long-term value.

 

Stay Informed and Protect Your Investments

As a property owner, it’s crucial to stay informed about the potential changes that could affect your investments. Visit our blog for more information on Proposition 33, how it will impact rental property owners, and what you can do to protect your assets. Together, we can preserve the rental housing market in California and ensure that property owners maintain the ability to manage their investments effectively.

 

What is Prop 33 and Why It’s a Threat to California’s Rental Housing Market

As California voters head to the polls in November 2024, one of the most significant measures on the ballot is Proposition 33. This controversial proposition aims to repeal the Costa-Hawkins Rental Housing Act, a state law that has provided vital protections against extreme rent control since 1995.

For property owners, real estate investors, and tenants alike, the outcome of this vote will have far-reaching consequences for the rental housing market in California. But what exactly is Prop 33, and why should you care? In this post, we’ll explore what’s at stake if Prop 33 passes, and why it’s crucial to vote NO this November.

Understanding the Costa-Hawkins Rental Housing Act

The Costa-Hawkins Rental Housing Act was enacted in 1995 to provide a framework that limits the extent of rent control in California. Here’s what Costa-Hawkins does:

– Exemptions for certain properties: Single-family homes and apartments built after February 1995 are exempt from rent control under the current law.

– Limits to rent control expansion: Cities that had rent control ordinances prior to 1995 cannot impose rent control on any apartments built after the date of the local law.

– Vacancy decontrol: This means that once a tenant moves out, property owners can adjust the rent to current market rates for the next tenant.

These safeguards have helped maintain a balanced approach to rental housing in the state, allowing property owners to earn fair returns on their investments while also providing reasonable rent control protections for tenants.

What Prop 33 Would Change

Proposition 33 seeks to repeal Costa-Hawkins entirely, opening the door to strict rent control policies across California. If passed, Prop 33 would allow local governments to impose price controls on single-family homes and apartments, regardless of when they were built. This could also mean that even newly constructed properties could be subject to rent control.

Additionally, Prop 33 would allow for the return of vacancy control* meaning that rents would no longer reset to market rates when a tenant vacates. This would severely limit a property owner’s ability to adjust rent, even when costs for maintenance, taxes, and improvements rise.

Why Prop 33 is a Threat to California’s Rental Housing Market

If Prop 33 passes, it could drastically alter the landscape of California’s rental market. Here are the key reasons why:

  1. Expansion of Rent Control to All Housing Types 

   Currently, single-family homes and newer buildings are exempt from rent control. Under Prop 33, all properties—regardless of age or type—could face price controls, which would dramatically affect property values and the real estate market in general.

  1. Return of Vacancy Control  

   Under vacancy decontrol, landlords can raise the rent to market rates when a tenant leaves. Prop 33 would remove this ability, creating situations where rents are capped permanently, even as maintenance costs and inflation rise.

  1. Discouraging New Housing Development 

   By imposing stricter rent control across all housing types, Prop 33 would discourage the construction of new rental properties, which are desperately needed to address California’s housing shortage. Developers would face fewer incentives to build if they know their properties will be subject to price controls.

  1. Increased Market Uncertainty  

   Removing the stability provided by Costa-Hawkins will lead to increased market uncertainty. Investors and property owners will be less likely to invest in the rental market, and some may even sell off their rental properties, leading to fewer rental units available.

  1. Impact on Property Owners  

   Small landlords and real estate investors who depend on rental income to cover costs and maintain properties would be hardest hit by Prop 33. By capping rents and limiting rental adjustments, many property owners may struggle to keep up with rising costs, forcing them to sell or abandon their properties.

Why You Should Vote NO on Prop 33

Passing Prop 33 would harm property owners, discourage new housing development, and worsen the ongoing housing crisis in California. While rent control might seem like a solution to rising housing costs, the reality is that it creates more problems than it solves by limiting the supply of available housing and reducing incentives for property maintenance and development.

By voting NO on Prop 33, we can protect the current balance in the rental market, ensure that affordable housing continues to be built, and preserve the rights of property owners to manage their investments responsibly.

Stay Informed and Take Action

It’s important for property owners, real estate professionals, and tenants to stay informed about the implications of Prop 33. Protect your property and your investments by voting NO on Prop 33 this November.

Stay informed with the latest updates and insights on California’s housing laws and rental property trends. Protect your investments by exploring our other resources and expert tips right here on our blog.

Our Experience at the NARPM Residential Property Management Expo 2024

On Thursday, September 26, 2024, the team at Real Property Management Select had the pleasure of attending the National Association of Residential Property Managers (NARPM) Residential Property Management Expo 2024 at the Citrus Heights Community Center. This event, hosted by NARPM’s Sacramento chapter, brought together property management professionals from across the region to network, learn, and stay up to date on the latest industry trends.

The day was packed with valuable insights and opportunities, including:

– 9 Educational Seminars: These seminars covered a wide range of topics important to property managers, from legal updates and best practices to innovative approaches in the property management field.

– Top Industry Speakers: Experts, including attorneys and officials, shared their knowledge on how to handle the ever-changing landscape of property management. These presentations gave us fresh ideas and actionable strategies we can use to improve our service.

– 40+ Exhibitors: The exhibit hall featured over 40 companies offering the latest tools, technology, and services designed to streamline property management operations and improve efficiency.

– Networking with over 200 Professionals: One of the best parts of the expo was the chance to network with over 200 industry professionals. We had meaningful conversations with peers and experts, gaining insights that will help us stay ahead in this competitive field.

At Real Property Management Select, we believe in constant learning and growth. Attending the NARPM Expo allows us to bring back valuable knowledge and apply it to the way we manage properties and interact with our clients. Whether it’s improving communication, adopting new tools, or staying updated on legal requirements, these experiences help us deliver stress-free property management.

The Expo reinforced our commitment to offering top-notch service by providing us with the resources and connections to keep improving. As the property management industry evolves, we stay at the forefront, ensuring our clients benefit from the latest trends and innovations.

We’re excited to implement what we’ve learned from the NARPM Expo to continue delivering exceptional property management services. Stay tuned for updates on how these new strategies will enhance your experience with Real Property Management Select!

At Real Property Management Select, we take pride in providing stress-free property management services. We handle everything from tenant screening and maintenance to legal compliance and financial reporting, allowing our clients to rest easy knowing their investment is in good hands. With the insights gained at the NARPM Expo, we’re more equipped than ever to deliver the best service possible.

If you’re looking for a property management team that stays ahead of the curve and is dedicated to your success, look no further.

 

Follow us for more updates, or contact us to learn how we can help manage your properties!