Home » Data Reports » For Better or Worse: Voters must decide on Prop 10

For Better or Worse: Voters must decide on Prop 10

On November 6, 2018, California voters will head to the polls to cast their votes in arguably one of the most important mid-term elections in recent memory. Aside from the national, state, and local candidates vying for voter approval, it is a ballot measure – Proposition 10, that could potentially have the greatest immediate impact on millions of residents across the state.  In the process, a “yes” vote on Proposition 10 could potentially reshape California’s real estate industry permanently.

Propostion 10 seeks to repeal the controversial Costa Hawkins Rental Housing Act.  Adopted in 1995, Costa Hawkins places limits on ability of individual cities to adopt stricter rent control.  According to Curbed LA’s Elijah Chiland, the bill was designed to “reign in rent control in five California cities, including Santa Monica and West Hollywood”.  At the time, those cities not only placed limits on the amount that a landlord could raise rents on existing tenants, but capped the amount owners could raise rents for new tenants through a policy known as vacancy control.

Fast forward to 2018, with many parts of the state locked in a severe affordability crisis, Costa Hawkins has become a flashpoint for tenant’s rights and affordable housing advocates. Supporters of the amendment suggest that by repealing Costa Hawkins, cities will have greater ability to protect tenants from skyrocketing rents by expanding the number of buildings which fall under the guidelines. Under the current law, only apartments built in Los Angeles before 1979 are subject to rent control. Additionally, under Costa-Hawkins landlords maintain the right to raise rents to current market rates, while also exempting single-family homes and condos from rent control.

Opponents of the measure claim that rent control fails to adequately address the real cause of unaffordability – a shortage of available units.  While, the claims that Prop 10 will make the crisis worse are generally speculative, opponents are correct in asserting that without significant levels of new construction, the bill’s passage alone will not end the housing crisis.

Less than one week to election day, polls show that voters are still relatively split on the bill.  The challenge facing voters is that both arguments have real merit.

Many residents, particularly those in “gentrifying” communities need some form of rent stabilization.  In South Los Angeles, rents have increased nearly 14% since 2014.  On the other hand, Prop 10 is not a silver bullet. The bottom line is that more multi-family development is needed across the city, particularly in South LA, where vacancy rates are among the lowest in the entire city.


Leave a Reply