Yesterday, Bernie Sanders announce his endorsement of Proposition 10 over Twitter, stating: “Currently California cities and towns aren’t permitted to pass rent control measures to address the affordable housing crisis. That should change. Municipalities should have the freedom to deal with the decline in affordable housing and rising rents. Let’s pass Prop. 10.”
He joins a formidable list of supporters including Los Angeles Mayor Eric Garcetti and San Francisco Mayor London Breed. But, if the polling is correct, it will probably not be enough.
In a poll that came out a week ago by the Public Policy Institute of California, 60 percent were opposed while only 25 said they would vote yes and 15 percent are undecided.
As Joe Trippi, lead strategist of the Yes on 10 campaign said, “The opposition campaign, funded by Wall Street investors and Donald Trump-supporting billionaires, has spent tens of millions of dollars attempting to confuse California voters.”
The measure would repeal the Costa-Hawkins Rental Housing Act, which places strict limitations on rent control in cities across the state. Voting yes on 10 would not implement rent control, rather it
would restore broad authority to cities to enact any rent control law they choose.
What is interesting is the poll that was done by USC Dornsife and the LA Times, finding that only a handful of Californians believe that insufficient supply of housing is to blame for the cost of rental housing.
The survey conducted between September 17 and October 14 reached 1180 residents and asked them to opine on the cause of the housing crisis.
Results:
- Lack of rent control: 28 percent
- Lack of low-income housing funding: 24 percent
- Foreign buyers: 16 percent
- Influence of tech: 15 percent
- Lack of homebuilding: 13 percent
- Wall Street buyers: 10 percent
When asking the same of those who consider themselves “likely voters,” the impetus for more building creeps up a little higher, but not by much:
- Lack of rent control: 28 percent
- Lack of low-income housing funding: 24 percent
- Influence of tech: 16 percent
- Foreign buyers: 15 percent
- Lack of homebuilding: 15 percent
- Wall Street buyers: 10 percent
These results are more than a bit confounding, although I’m not sure I would ask the question as they have done. It may not tell the pollsters what they want.
The poll also found that only 31 percent of those asked wanted the state to exert more control over housing policy while 69 percent prefer local control. On the other hand, the Prop. 10 ballot did much better in this poll than in others, with 41 percent favoring it versus 38 percent against.
That suggests that the results here may be a bit skewed, with many other polls showing Prop. 10 getting killed.
The question, I think, we have to ask is whether the ballot language itself is confusing – do people understand that voting yes means their local city council decides the issue of rent control, while a no vote means the state legislature does?
If Prop. 10 were to pass, that means that cities would get to decide whether to approve rent control measures, they could decide to limit annual rent increases or establish another form of rent control, or they could decide to do nothing at all.
As of late October the money was big, with a nearly two to one advantage for the no side.
A figure of $23.7 million was spent in support of Prop. 10, which includes money from: California Teachers Association, with $500,000; California Nurses Association, $350,000; East Bay Working Families, $84,393; and the American Federation of State County and Municipal Employees, $60,000.
On the other hand, $42.6 million has been spent opposing it. That money has come from: Blackstone with $5 million; Essex Property Trust, $4.8 million; California Association of Realtors, $4 million; Equity Residential, $3.7 million; and Avalonbay Communities, $3 million.
Some of the groups to oppose Prop. 10 are the State Building and Construction Trades Council of California, California Chamber of Commerce, California Apartment Industry Association and the California Farm Bureau Federation.
Some of the biggest groups endorsing Prop. 10 are the California Labor Federation, California Democratic Party, Housing Federation and the American Civil Liberties Union of California.
—David M. Greenwald reporting
I think the results of the poll aren’t really confounding at all. In my mind they simply illustrate the basic financial and economic ignorance which is widespread and far-reaching among voters. Asking people to diagnose the causal factors behind complex systems is bound to produce a litany of responses but very few correct or even reasonable answers. A while back, the chairman of the SEC reported that 50% of Americans didn’t know the difference between a stock and a bond. In an environment of such profound and endemic ignorance, asking the public their opinion on any kind of technical issue won’t really tell you anything more than that the public doesn’t know what they are talking about despite being quite self-assured that they do.
Wesley, Good point. This is why I am always dubious of any initiative. We elect our representatives to take on the burden of making detailed decisions after we give broad general direction. If we don’t like those decisions, we should 1) turn them out and 2) change the rules for how we elect them. I have ideas of how to do the latter, but that’s a different discussion.
I’m an owner of 3 rental properties, 10 units total. What you don’t realize if you don’t own rentals is that:
for the years 2008 to 2014 we lowered our rents and then didn’t raise them until 2015. Many of us lost our property in foreclosure.
Providing housing is work. It costs money and time. Tenants are not saints. They’re often dirty and hard on interiors like floors, walls, carpets, and appliances. A set of washer/dryer is $2000. A fridge is over $600 now. Gardeners, utilities (water is hugely expensive), taxes, insurance, it all costs a bundle. And it’s constant. I just paid $30,000 for a roof. My yearly property taxes just in Berkeley are over $10,000. I’ve had to get a loan a couple of times just to pay the property taxes.
In berkeley, where the original costa Hawkins lawsuit started, they had rent control of the most extreme kind until 1995. This was the rent control where even if someone moved out you couldn’t raise the rent. Berkeley was a slum. No landlord could afford to maintain the property. The county stil raised taxes, the water rates went up, the insurance costs went up, the plumbers charged more etc. just the landlords couldn’t increase the rents. Who’s going to paint or hire a gardener or roof a place when you can’t recover your costs?
Tenants who graduated from Cal in the 80’s are still in their cheap apts and don’t move. Honestly, what if I told you that your salary wouldn’t go up if you got your job in the 80’s? Or go up 1.2% a year? I have a tenant who makes over $150,000 a year in a one bedroom apartment for 12 years. Rent controlled. She says she’ll never move.
the words “greedy” and “landlord” don’t go together. Guess what? No other business is forced to subsidize its customers. And if you’re a tenant you’re a customer. The worst possible kind who can sue for whatever fantasy thing you can make up, who can refuse to pay, make a huge mess, be a pain in the a**, be nuts, whatever. And a property owner has to be afraid of possible lawsuits.
If you want affordable housing then build it. Have the govt subsidize it, or fund more vouchers. But don’t make life hell for mom and pop owners who provide housing all over the state and nation.
vote no on 10
The results are here
https://drive.google.com/file/d/1puMjLSn1jEqXx4mevNIG2JkOVcKg5iHy/view
Note that the obvious answer “too many people” was not offered while left wing conspiracy ideas like “wall street buyers” were offered. On Jim’s “BS Meter” this poll gets a solid “7”.
Thanks Jim. Ironic that Trump’s name was used and Trump continues to label parts of the media dishonest and here is yet another example.
It’s also interesting that David decided to pull that quote and post it here in his article.
It was part of the press release
Jim
What’s your proposal for keeping people out of California? And what’s your proposal for limiting global population growth beyond the current efforts that have already reduced the growth trajectory? (Note that China appears to fallen below the replacement birth rate.)
I don’t have any proposals yet. I am concerned that the problem is being glossed over and am not willing to be silent. The referenced article is classic, avoid the obvious and try to make sense of what’s left.
We have twice as many people in the world as we had in 1972.
LOL, was Trump’s name thrown in there to try and get the TDS vote?
Needless to say, I find this encouraging. I only wish that the Gavin Newsoms and Scott Weiners of the world would listen. (They’ve got other plans.)
I recall that Gavin Newson recently discouraged folks from voting for Proposition 10, stating that he “has a plan” for taking care of the problem. (Hint – his plans include a dramatic increase in building, and weakening of local control. Something that Scott Weiner has already been pushing through, with Governor Brown’s support.) Gavin Newson is poised to become a lot more aggressive than Brown.)
If you want to encourage the new Governor’s “plans”, one can do so by supporting the housing construction bonds on the ballot. Putting the state further in debt, in the process.
Newsom seems to have significant connections (and direct involvement) in the business world. There was a news report last night that he has business holdings that could create conflicts of interest, if elected. (He apparently said that he’ll deal with that, after the election.)
And yet, all of this is occurring as the housing market is showing signs of a “correction” (downward).
Yes, look out, Gavin Newsom (Pelosi’s nephew) had a hand in ruining San Francisco and his policies could very well do the same to California.
Not only that, but if you become his friend or employee, he will sleep with your wife.
Gavin’s Dad’s Sister married Congresswoman Nancy (D’Alesandro) Pelosi’s Brother in Law, but that does not make him her “Nephew” (just “Brother in Law’s Nephew”)…
I remember reading a few times that actor Ed Asner was Gavin’s “Uncle” but with all the divorces (and affairs) in his extended family (and circle of friends) I don’t know if Ed is still married to Gavin’s Aunt…
https://www.jweekly.com/2008/05/09/no-sweat-for-newsom-s-f-mayor-makes-history-with-visit-to-holy-land/
““What is interesting is the poll that was done by USC Dornsife and the LA Times, finding that only a handful of Californians believe that insufficient supply of housing is to blame for the cost of rental housing.”
“The poll also found that only 31 percent of those asked wanted the state to exert more control over housing policy while 69 percent prefer local control.””
If you believe as I do that most people think we have too many people then the results make perfect sense. “Local Control” meaning “population control” to most people.
I think everyone who believes there are too many people in the state should lead by example.
Perhaps starting with not “creating” more. (Especially beyond a couple of “replacements”, subsidized by taxpayers.) 😉
That is happening and they tend to be people with higher incomes.
The people who are leaving are those with lower incomes. We are becoming a state of affluent and mass affluent and those with nothing.
Which was the whole point of the economist artist.
The only solution is to decrease the population. Most of the lower SES population are doing their best through obesity, smoking, etc. But it is not enough.
And what’s your plan for accomplishing that, Jim?
“what’s your plan”
First step to any solution is to identify the problem.
Unless you yourself are willing to leave, all you’re basically doing is saying I have mine, get your own somewhere else.
“all you’re basically doing is saying I have mine, get your own somewhere else”
yes
That’s a cop-out. If you’ve identified a “problem” that can’t be solved by any reasonable means, then you are not contributing to the discussion. Are suggesting, for example, a One-Child policy? Eugenic sterilization? A border wall around the entire state? If none of these, what?
cop out
phrasal verb of cop
INFORMAL
avoid doing something that one ought to do.
A cop-out is to declare a problem unsolvable before you have even attempted to solve it.
Oh, come on! You are avoiding responding to the question because you have no reasonable solution to suggest. Or pick one of the other alternatives below.
Synonyms for cop out: Noun
avoidance, dodging, ducking, eluding, elusion, escape, evasion, out, shaking,shunning
Eric,
You come from the political world which has a process completely different from other entities. In the political world you start with the end point and try to identify a rational ie “The nurses union has been increasing donations, how can we reward them?”, or even “my garage door is too heavy, how can I inconvenience the largest number of people?”
In other areas of life people start with the challenge and try to find the best solution ie “how many walnut trees should we plant on a acre of land and what is the best arrangement of the trees?”
So in your opinion, given our resources, what is the greatest reasonable population of coastal California? Give me a number, don’t cop out.
Jim –
What nonsense. You proposed a solution to the housing problem (reduce the state’s population) but are unable to explain how that could be accomplished short of some draconian measure. (History has examples of those.) Unless you have more to offer, your “solution” is not a viable option and certainly not worthy of discussion. (You also have a warped view of how things work in the so-called “political world.” And you have no idea what my background and experience is.)
Those who already own houses, live in Affordable housing, or are protected by rent control have no incentive to leave. They’re not the ones who are experiencing significantly rising housing costs. Same goes for upper-income folks (who are moving into California), and aren’t as impacted by rising costs (but are simultaneously displacing lower-income people).
Unfortunately, developers have now joined alliances with (some) renters. (Even though those same developers/landlords are often the same ones gouging renters in the first place.) Some renters have bought into the “promises” hook, line and sinker. (But, perhaps not all that many, as demonstrated by the survey results.)
The YIMBY “movement”, for example, is fake. It’s financially supported by businesses who have a stake in that advocacy.
Normally I defer to experts in their chosen field and given your employment in the state government nonsense is likely a key aspect of your daily work. I will note that you have copped out of offering a population ceiling for coastal California.
Let me make it multiple choice for you:
40 Million (approximate current)
60 Million (50% increase)
80 Million (100% increase)
400 million (1000% increase)
Pick one
But really, this isn’t about getting people to “leave”. It’s really about how much more the city, region, and (semi-desert) state should grow and develop (e.g., beyond 40 million people). A topic that development interests and their allies avoid discussing. They’ve become quite skillful at deflecting from that topic.
Ron – You are trying to make sense of Jim’s solution. He never said “limit growth.” He has, on multiple occasions, said the only solution to the housing crisis is to “reduce the population.” Perhaps he should suggest how much below the current population he proposes the reduction to be, and how he proposes to get there.
Eric: I am not trying to “make sense” of Jim’s solution, as I’m not sure what that is. I’m just adding my own thoughts, separate (but somewhat similar) to Jim’s.
I can tell you that my “California” solution essentially includes growth/development limitations, along with some Affordable housing and perhaps rent control (if needed). In fact, pieces of this already exist, throughout the state.
On a broader level (over which I have even less control), I’d suggest that we’re due for a change in culture (and tax policies), regarding endless growth and development.
Truth be told, I’m more interested in Russ’ comment today (regarding WDAAC), because I view this as essentially a microcosm of the type of concerns that arise (regarding growth and development) that occur throughout the state:
https://davisvanguard.org/2018/10/commentary-vote-no-wdaa-low-density-housing-periphery/#comment-397519
Actually, Russ’ original comment can be seen here. And again, I view this as essentially an example of the types of concerns (regarding growth and development) that arise throughout the state, over-and-over again:
https://davisvanguard.org/2018/10/commentary-vote-no-wdaa-low-density-housing-periphery/#comment-397456
Eric, perhaps my wife is correct and my communication is not good. I have suggested population reduction in response to specific complaints on TPV. When people complain about the price of housing I suggest population reduction as the most effective solution. At other times I point out that policies people support lead to outcomes they deplore.
I am not complaining about the price of housing.
Mandatory Planned Parenthood clinics in every new subdivision?
“When people complain about the price of housing I suggest population reduction as the most effective solution. ”
Except your wrong. It is not an effective solution because there is no practical way to implement which is why you cannot come up with an answer as to how you’ll achieve it when pushed multiple times. You’re completely failing to recognize this as a flaw in your “effective solution.”
Don: Sometimes, when I really think about life, I realize that everyone commenting on here will be dead within a few decades (at most). Some of us sooner than others. I, for one, am expecting to be dead sometime within the next 40-45 years or so, most likely. (At the most, really.) For some reason, it doesn’t really bother me to think about it.
I guess my point being that if we (as a society) ever became serious about considering endless population growth and development, the problem would take care of itself sooner than it might seem (perhaps even sooner than the problems associated with global warming, species extinction, and resource limitations, for example).
(That wasn’t a “threat”, by the way.) Please don’t call the SWAT team. 🙂
California is not nearly as population dense as is Hong Kong, Singapore or Seoul for example.
In terms of state rankings, it is only #17 in population density. For point of reference, it is surrounded in the rankings list by Ohio and Illinois.
I don’t think the problem is too many people. Maybe too many people all wanting to live in certain areas of the state. Maybe it is too many people clinging to a history of open space. Maybe too many entitled people live here?
I think it is that too many poor people live here. And add to that the weather and the economic prospects, and we have the source (not the solution).
With respect to the affordable housing shortage, it is not a problem unique to Davis… nor is it unique to the state. The entire west coast is a mess of too few affordable housing units. https://nlihc.org/gap
Florida and Colorado also come up short. Texas is on this list too.
This map shows the percentage of K-12 students with undocumented immigrant parents. https://goo.gl/images/mvY5yR
This too pretty much connects the immigrant population with the first map of affordable housing shortages.
So too many poor immigrants is the root cause of our housing shortage.
And you can see how this plays out in Davis. Since there are so many poor needing affordable housing, the Davis social justice activists demand that all new development be affordable housing. And so there are fewer single family housing units build, and fewer other type of housing built that appeals to demographics other than the poor.
The solution? See Trump. And vote for Gavin Newsom as he will help destroy more of the state’s economic power. Global warming is also helping… burn more fossil fuel.
When Bernie wrote: “Currently California cities and towns aren’t permitted to pass rent control measures” and David writes: “If Prop. 10 were to pass, that means that cities would get to decide whether to approve rent control measures” I’m wondering if David and Bernie are not aware that “Currently” California cities are free to pass rent control on all older multifamily apartments and all Prop 10 would do it allow them to add single family homes and newer apartments to rent control (that are currently prohibited from rent control due to Costa–Hawkins) or are lying to try and trick people into thinking voting for Prop 10.
P.S. I try and ignore most polls that gives people a choice of answers (since a poll that asked people to vote if they thought President Trump was 1. The best President Ever, 2. A Space Alien, or 3. A giant lizard in a suit with an orange wig would probably result in 90% of the people in saying he is a “Space Alien”). Less than 1% of the people in CA have any idea that Blackstone and other Wall Street firms own a lot of SFHs in the state…
Very few people in large complexes know who owns them. They generally just know the management company and knowing that they are owned by LLC#10 at a REIT is not particularly interesting.
I saw this and while I am not sure whether it is true it would not surprise me “In 2015, nearly 60 percent of U.S. property purchases for more than $3 million were made by LLCs, most of them registered anonymously in the U.S. or with a secret registration abroad in a tax haven.”
As part of the JOB Act passed by Obama there was a new IRS program called “Roll-over as Business Start-up” (ROBS). This allows individuals to create a corporation and roll-over their IRAs and past employer 401k money into that corporation. One real common business is a real estate holding company. Millions of people took advantage of this program to buy up real estate instead of starting small business that would create jobs… what the program was intended for.
“Currently” California cities are free to pass rent control on all older multifamily apartments and all Prop 10 would do it allow them to add single family homes and newer apartments to rent control”
At this point newer apartments are from 1995 and forward. So basically anything built during my lifetime, to put this into perspective.
In the past 55 years with one exception I have not lived in a home, dorm, apartment, or condo “built in my lifetime”. I could not find the exact number (I think Don posted something a while back about the relatively small percentage apartments built in Davis since 1995) of but I feel safe saying that “most” duplexes and apartments in Davis were built before 1995.
The results of those published polls (which are already unbelievable given the source) are yet another clear bit of proof for why direct democracy is a terrible idea. Ignorance festers like an oozing boil.
I make loans to small business owners and get to look at their personal tax returns. 95% of these borrowers own rental properties… many of them multiple rental properties.
One of the primary causes of housing cost inflation is a change in personal wealth management practices that started about 30-35 years ago where financial advisors, realtors and others started to recognize the ability to generate stronger returns from residential real estate investment. It became the common recommendation to have real estate in a personal investment portfolio in addition to a primary residence.
As in most problems with the economy, it was the government that screwed it up.
The mortgage deduction. The Carter era Community Reinvestment Act that continued on with the Bush Ownership Society idiocy, then Freddie Mac and Fannie Mae, the repeal of Glass Steagall, decades of the Fed manipulating rates to protect the Chairman’s legacy and help the POTUS at the time appear to have a stronger economy that was really only propped up by high domestic consumer debt spending. Bonehead trade policies that gave away full industries to lowest wage countries. Environmental extremism including mechanisms like CEQA and other regulatory, fee and tax increases on business.
All of this and more pushed people to invest in owning real estate to generate selfish returns rather than investing in small business (for example, a small business that would build housing and/or make products that helped advance housing affordability in some way) that would share earnings with workers.
Those borrowers of mine that have several rental properties… why did they not inject their personal capital back into their business instead of increasing the demand for housing as investment vehicles and driving up the prices and thereby increasing their equity?
Anyone reading this that owns rental properties is complicit in making housing less affordable.
Instead, you should sell you rental properties and use the returns to start a small business that provides jobs and allows workers to share in the returns of the success of that small business. Then you help in two ways… you reduce the demand for residential real estate thus causing a drop in price, and you help increase the income of people that otherwise have trouble affording rents.
The other thing you should do it to stop voting for idiot politicians that believe they can engineer the economy for social justice. The road to high rent hell is paved with all the past good intentions of these idiot politicians.
New medications have been so successful in managing this disease that foundations are looking for a new mission. More on AHF
https://www.nytimes.com/2017/04/26/magazine/the-ceo-of-hiv.html
Interesting read. 501 c 3 gone bad.
It appears that the largest donation to the Yes on 10 campaign is $10,000,000 from the AIDS Healthcare Foundation.
https://www.aidshealth.org/2018/08/ahf-contributes-10m-to-yes-on-10-campaign/
VACANCY TAX: BETTER THAN RENT CONTROL
Rent control doesn’t force owners to offer their properties “to let” at the allowed rent. Nor does it force land owners to build more housing. Indeed it discourages both, reducing the supply of housing and therefore RAISING the rents of whatever part of that supply is not subject to rent control. Exempting NEW buildings from rent control may avoid deterring construction, but it still doesn’t open up EXISTING buildings for tenants. Worse, it means that the stock of rent-controlled housing becomes a shrinking fraction of the whole housing stock — unless the exemption is only for a limited time, in which case you’re discouraging construction again!
Will removing regulatory barriers to construction solve the problem? Not by itself, although it’s obviously a necessary condition. Cheaper housing requires developers, builders, and owners to increase supply to a point where it reduces their return on investment. They obviously won’t do that voluntarily. They will do it only if they are penalized for NOT doing it.
SOLUTION: Put a punitive tax on vacant lots and unoccupied housing, so that the owners can’t afford NOT to build housing and seek tenants. By increasing supply and reducing owners’ ability to tolerate vacancies, a vacancy tax strengthens the bargaining position of tenants and therefore reduces rents (and forces landlords to expedite any necessary repairs in order to attract tenants). It yields both an *immediate* benefit, by pushing existing dwellings onto the rental market, and a *long-term* benefit, by encouraging construction.
Such a tax, by reducing the cost of housing, would make it easier for employers to pay workers enough to live on. A similar tax on commercial property would reduce rents for job-creating enterprises. That’s GOOD FOR BUSINESS and GOOD FOR WORKERS.
A vacancy tax is also GOOD FOR REALTORS because they get more rental-management fees for properties coming onto the rental market, plus commissions from any owners who decided to sell vacant properties to owner-occupants (who of course don’t pay the tax).
Best of all, the need to avoid the vacancy tax would initiate economic activity, which would expand the bases of other taxes, allowing their rates to be reduced, so that the rest of the city/state/country gets a tax cut!