Proposition 33 is about rent controls. It would repeal the current state law (the Costa-Hawkins Rental Housing Act of 1995) which limits the authority of cities and counties to control rents within their jurisdictions.

In three different situations, this law “generally prevents cities and counties from limiting the initial rental rate that landlords may charge to new tenants in all types of housing.”

“First, rent control cannot apply to any single-family homes. Second, rent control cannot apply to any housing built on or after February 1, 1995. Third, rent control laws generally cannot tell landlords what they can charge a new renter when first moving in. Instead, rent control can only limit how much landlords increase rent for existing renters,” according to the Legislative Analyst’s Office’s evaluation of Prop 33.

Besides repealing the Costa-Hawkins Rental Act, Prop 33 would also prohibit the state from limiting the ability of cities and counties to maintain, enact, or expand residential rent-control ordinances. Another state law prevents most landlords from increasing a tenant’s rent by more than 5% plus inflation (up to a total of 10%) in a year. This law lasts until 2030.

Prop 33 does not affect any existing local government’s rent control laws. “About one-quarter of Californians live in communities with local rent control. Examples of places with rent control are the Cities of Los Angeles, San Francisco, and San Jose,” the LAO estimates.

As of 2023, seven states and D.C. have enacted rent control policies at the state or local level. Thirty-one (31) states have enacted laws preempting local governments from adopting rent control policies. In 12 states, no cities have rent control but rent control was not preempted, according to Ballotpedia (//ballotpedia.org/California_Proposition_33,Prohibit_State_Limitations_on_Local_Rent_Control_Initiative(2024))

Fiscal Effect

If Prop 33 passes, local rent control laws will become more common. This will affect renters, landlords and rental property owners.

Regarding rental houses, the LAO made two statements, “Fewer homes would be available to rent. One reason for this is that some landlords would sell their properties to new owners who would live there instead of renting it out.”

Secondly, the LAO estimated, “The value of rental housing would decline because potential landlords would not want to pay as much for these properties.”

Local governments would encounter two changes. The lower value of rental housing would reduce property taxes. Secondly, more local ordinances governing rental properties would engender more local government oversight which would increase operational costs.

The summary assessment stated, “Reduction in local property tax revenues of at least tens of millions of dollars annually due to likely expansion of rent control in some communities.”

Arguments in favor of approval

The principal supporter of Prop 33 is Justice for Renters, which is sponsored by the AIDS Healthcare Foundation, a Los Angeles nonprofit that has been active in housing and planning issues in recent years. This group was behind two similar statewide rent control initiatives that failed in 2018 and 2020.

The supporters argue that rents are too high. More than half of Californian renters expend more than 30% of their income on rental payments.

“A starting teacher, cop, or fire fighter is paying half their salary to afford the average apartment in California’s cities. Many who live on a fixed income are one rent increase away from homelessness— and seniors represent the fastest growing homeless population. Something has to give,” the proponents stated in the Voter Information Guide.

Rent control laws are not a recent innovation, according to the supporters. As early as 1919, local governments were taking some action to control rents. However, in California, they note, “It was largely shut down in 1995 when the landlord lobby convinced Sacramento to drastically curtail it. Ever since, corporate landlords have made sure that the Legislature doesn’t modify the law no matter how bad things get.”

Although they expressed sympathy for “mom and pop landlords,” the major proponents asserted “. . . it is the billionaire corporate landlords who are calling the shots and causing skyrocketing rents.”

Its supporters include the following groups or associations: California Democratic Party, Veterans’ Voices, California Nurses Association, CA Alliance for Retired Americans, and the American Federation of Teachers 1521.

Arguments against Prop 33 approval

The opposition is primarily in the real estate industry. Other opponents include the California Small Business Association, the California Senior Alliance, the California Conference of Carpenters, and the California Chamber of Commerce. Also, some leaders of the State’s Democratic party, including Senate President Pro Tem Emeritus Toni Atkins.

Their first point is that nearly 60% of voters defeated similar rental control measures in 2018 and 2020.

“Prop. 33 is misleading. The measure could effectively overturn more than 100 state housing laws, including laws making it easier to build affordable housing, and fair housing and tenant eviction protections,” they argued in the Voter Guide.

Prop. 33 has no protections for the alleged weakened population groups, such as seniors, veterans, or the disabled, opined the opposition’s arguments.

Other comments

The League of Women’s Voters is neutral on Prop 33. They stated, “Rent control may be an effective short-term solution but studies suggest that its longer-term impact may discourage construction of new housing units, as developers could find it less profitable to build rental units if the rent is controlled by law. This could stifle the building of high-density and more affordable housing and exacerbate the existing housing shortage.”

The Los Angeles Times recently opined on Prop 33, “Supporters say Proposition 33 will give local governments tools to ease the affordability crisis for their residents. Opponents counter it will cause developers to build less, thus worsening California’s housing affordability.”

Financial support

The Political Action Committee supporting Prop 33 is “DeLeon believing in a Better California Ballot Measure Committee.” As of Sept. 26, they reported collecting $550,000 since Jan. 1 and had expended $380,000. Their cash available was $217,000. It has not reported any further contributions since Sept. 26.

There are seven PACs official raising money to oppose Prop 33. “Home Ownership for Families” sponsored by the California Association of Realtors, had $25.8 million in cash available as of Sept. 21.

Current Poll results

Of the 10 propositions, 13% of likely voters were most interested in Prop 33

As of the middle of September, a bare majority of 51% of likely voters were ready to cast a “Yes” ballot for Prop 33. The largest number of supporters were Democrats, Latinos, and people between 18 and 44. The greatest support (57%) came from the Los Angeles area, while 54% (the second highest) of the Inland Empire likely voters supported this proposition.

At the end of September, a University of California, Berkeley Institute of Governmental Studies poll found the support at 38% and opposition at 37%