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How would the statewide vote on rent control affect SLO County housing?

What you need to know about Proposition 10: Expanding rent control

What is Proposition 10? Here's a deeper look at the rent control initiative on California's November ballot that would authorize stronger rent control laws.
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What is Proposition 10? Here's a deeper look at the rent control initiative on California's November ballot that would authorize stronger rent control laws.

San Luis Obispo County voters will consider a statewide rent control measure when they go to the polls in November.

But will Proposition 10 have an impact on local renters and property owners? It might, but not unless elected officials take action to regulate area housing prices.

Rent control is enacted by local governments, who can use various methods to moderate housing costs. Prior to the mid-1990s, some California cities, such as Berkeley and Santa Monica, had strict rent control measures that allowed landlords to raise the rent by only a small amount each year.

Then, in 1995, the state Legislature passed the Costa-Hawkins Rental Housing Act, which restricts local governments from making such stringent housing laws.

Under Costa-Hawkins, cities can still enact rent control, but it cannot apply to single-family homes, condominiums and multi-family complexes built after 1995, and sometimes even earlier, depending on the community. Local governments also can’t keep landlords from raising rents when tenants move out.

The Bay Area city of Mountain View passed a 2016 ballot initiative enacting the limited form of rent control allowed under Costa-Hawkins, according to a September Los Angeles Times story.

Proposition 10 would repeal Costa-Hawkins, allowing local officials to have more say over rent control in their communities. But unless cities already have rental regulations on the books, that would require new action by local governments.

Does SLO County have rent control?

Housing affordability has become an increasingly urgent issue in San Luis Obispo County, where about 40 percent of households live in rental units, according to 2016 U.S. Census Bureau data.

The cost of renting a two-bedroom unit in the county is up more than 50 percent since 2013 the largest increase in the state in that time. Residents paid $2,139 in median rent — meaning half of renters paid more and half paid less — for a two-bedroom unit in September, according to real estate tracking firm Zillow.com.

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Even so, rent control hasn’t been part of the affordable housing discussion, which has centered around strategies such as new construction, bond measures, special taxes and inclusionary housing programs, which require developers to build affordable units or pay in-lieu fees.

A form of rent control does exist in at least five areas of the county, where local governments can control rent increases in mobile home parks. This type of rent stabilization exists in unincorporated areas of San Luis Obispo County, as well as the cities of Morro Bay, Grover Beach, Pismo Beach and San Luis Obispo.

The county went to court over its rent control ordinance in the early 2000s, after a mobile home company tried to hike rents for a group of Los Osos residents living in Sea Oaks Mobile Home Community, according to Tribune, New Times and Los Angeles Times articles.

Rent control and Proposition 10

So why isn’t rent control considered more in San Luis Obispo County? As efforts to enact a Rental Housing Inspection Program in San Luis Obispo demonstrated, rentals are a volatile issue here.

The City Council adopted the program in 2015 to combat substandard housing conditions. But fees and privacy concerns made rental inspections very unpopular — the issue played a major role in the 2016 city elections.

“The reality is, rent control is hard to pass,” said Scott Smith, executive director of the Housing Authority of San Luis Obispo. “I think it can bring some benefits, and it can bring some problems along with that.”

Local housing and building groups have declined to take a position on Proposition 10, although it’s endorsed by the San Luis Obispo Democratic Party.

San Luis Obispo Mayor Heidi Harmon said she would welcome local control over the issue, but the city’s residents should be the ones to decide whether to take up the policy locally.

“If it passes, everyone’s going to have to be open to considering it, because it would become an option,” Harmon said.

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Grover Beach Mayor John Shoals said the City Council declined to take a position on Proposition 10.

“If it passes, I think it would certainly be something we would want to bring back and look at the pros and cons,” he said.

Shoals called rent control a “complex issue” and said it’s important to strike a balance between maintaining a free market economy and helping residents find affordable housing.

For and against

The Yes on 10 campaign is supported by affordable housing groups, politicians, and cities, such as Santa Monica and Berkeley. The No on Prop 10 campaign is backed by politicians, chambers of commerce and also many real estate stakeholders, such as developers, property management companies and real estate brokers.

Anti-Proposition 10 groups have outraised supporting interests by a better-than 2-to-1 margin, nearly $60 million to $23 million, according to Oct. 11 state campaign finance disclosures. Polls over the last month have shown the measure trailing among likely voters.

Shea Homes, which built the sprawling Trilogy community in Nipomo, recently donated more than $200,000 to No on Prop 10.

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Andrew Hackleman, executive director of the Home Builders Association of the Central Coast, said in an email that rent control could have a “chilling effect” on housing production if such regulations mean developers can’t make a project pencil out.

“I understand why some may want to do more to make progress on affordable housing,” he said. “But rent control without more housing production will not help. And if Prop. 10 (and subsequent local rent control measures) results in a dampening of new housing starts, then I think it’s probably not a good thing.”

Smith of the Housing Authority isn’t entirely sold on rent control, either. He said there are other planning and zoning solutions that may work better than changing the rules of the marketplace, as long as elected representatives don’t just pay lip service to them.

“I think what you’re hearing is a lot of basic human frustration about the inability of the housing market to meet our needs,” he said.

But Charly Norton, spokeswoman for Yes on 10, called California’s housing situation an “urgent crisis we need to act on immediately.” She said the status quo benefits predatory landlords, something Proposition 10 could help fix.

“It’s a simple measure that can empower communities to limit skyrocketing rent,” she said.

Lindsey Holden: 805-781-7939, @lindseymholden
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