Will Voters Repeal Costa-Hawkins in 2018?

by on October 26, 2017

Activists Plan Repeal Measure for November ’18 Ballot

Liam Dillon’s October 23 Los Angeles Times story broke the news:  activists are moving forward toward placing an initiative repealing California’s Costa-Hawkins law  on the November 2018 ballot.

I recall that dark day when State Senator Nicholas Petris betrayed his Berkeley constituents in casting the key vote to get Costa-Hawkins out of committee where it had been kept bottled up for years.  Costa-Hawkins was a product of a new term limits law and the GOP’s brief control of the California Assembly, though support was bipartisan (Jim Costa was a Democrat).

Costa-Hawkins exempts most single family homes and all condominiums from rent control. Most importantly it barred cities from restricting rent increases on vacant apartments (i.e. vacancy control). Cities inability to limit rent hikes on vacant apartments has worsened housing affordability in rent-control jurisdictions.

Repealing Costa-Hawkins does not impose vacancy control in  San Francisco, Los Angeles and Oakland where it never existed. All it does it return to localities the option of enacting vacancy control as one strategy for  addressing their affordability crisis.

The Five Rules for Successful Ballot Initiatives that I include in my book, The Activist’s Handbook, almost always predict the outcome. Here is how they apply to the Costa-Hawkins’s repeal measure

Who’s Behind It?

According to the Times story, “the Alliance of Californians for Community Empowerment (ACCE), a nonprofit community organizing group, is the primary backer of the initiative. The organization said it had the support of major tenant groups up and down the state and Michael Weinstein, the leader of the AIDS Healthcare Foundation.”

I don’t know which “major tenant groups up and down the state” were included in the decision-making process but I know some tenant organizations do not feel they were given much input.  But the real problem concerns Michael Weinstein.

Earlier this year Weinstein’s group provided 99% of the funding ($5 million) for a ballot measure (Prop S) restricting development in Los Angeles. A broad coalition of labor, nonprofit housing groups, business, and developers spent roughly $8 million to defeat it.

Here’s what Rusty Hicks, executive secretary-treasurer of the Los Angeles County Federation of Labor, said after the election,  “Defeating Measure S has spared our city from a future that would’ve meant fewer jobs, fewer funds for critical public services, fewer new homes for those who desperately need them, and even less affordable rents.”

Do you think that after battling Weinstein over Prop S the powerful Los Angeles County Fed is going to join with him on Costa-Hawkins repeal? Or that the other nonprofit and progressive opponents of Weinstein are going to join a campaign where he is a key player calling the shots?

One of the Five Rules for Successful Ballot Initiatives that I include in The Activist’s Handbook is “Create the Initiative Through Due Process.”  Weinstein’s role in the proposed Costa-Hawkins measure fails this test. This could prove fatal, as tenants cannot win Costa-Hawkins repeal without strong labor backing. I don’t see that happening with Weinstein so centrally involved.

The Political Context

California is undergoing an acute affordability crisis. While the fifteen housing bills enacted in 2017 will help, everyone from the Governor on down believes more must be done.

One of the key bills placed a $4 billion veterans and housing bond on the November 2018 ballot. There will be the biggest pro-housing coalition ever assembled to win passage of this bond. Nonprofit housing groups have made its passage their top priority. This immediately raises the question how this coalition would relate to the Costa-Hawkins repeal measure on the same ballot.

Many progressive pro-bond groups will stay out of the Costa-Hawkins fight. They will argue that they need to focus on the bond, and will see the Costa-Hawkins initiative as divisive to that effort.

Another of my Five Rules is “Evaluate the Political Context.” Proponents of the initiative saw a great opportunity to ride the wave of the affordability crisis. Yet the housing bond measure offers realtors and other opponents of Costa-Hawkins repeal the chance to say that the “real” solution to the affordability crisis is the  bond. The November 2018 timing may not be the best.

Would the Legislature repeal Costa-Hawkins?

Another of my Five Rules for Successful Initiatives is “There is No Other Way.”

It’s hard to win a statewide measure challenging powerful interests. It’s even harder when opponents can argue that the initiative circumvents the legislative process. That’s why trying and failing to repeal Costa-Hawkins in Sacramento may be a prerequisite to winning at the ballot.

Is a legislative victory possible? Considering that in 2014 and 2015 the legislature rejected a San Francisco-only reform to the Ellis Act that protected vulnerable seniors from eviction, the answer seems like an obvious no. But attitudes about affordability have changed a lot in Sacramento in the past year.

If Mayor Eric Garcetti got Los Angeles’ legislative delegation behind Costa-Hawkins repeal, I could see some reforms—like eliminating rent control exemptions from single family homes—passing. But getting the legislature to repeal the measure entirely would require the emergence of factors not evident today; that’s why a major statewide legislative campaign in 2018-19 would set the stage for a repeal measure on the presidential ballot in 2020.

Can A Repeal Initiative Win?

Let’s assume Tom Steyer was willing to put $25 million dollars into a repeal initiative for the 2018 or 2020 ballot. Or some other donor lacking the baggage of Michael Weinstein. Let’s also assume that the coalition to pass it was led by state and local labor officials, housing groups, and a broad progressive constituency.

Could such a measure win?

The final two of my five rules for winning measures are “Keep it Simple” and “Appeal to Voters’ Self-Interest.” A strict repeal measure, which is what ACCE has submitted, meets the simplicity test. The real question, as it is for most measures, is whether Costa-Hawkins repeal serves the self-interest of a significant portion of the electorate.

A majority of California’s electorate in November 2018 or 2020 will not be covered by rent control. This includes the vast majority of homeowners (some are also landlords) and a sizable minority if not majority of tenants.

Under a best case scenario, Costa-Hawkins repeal wins 65-35 in San Francisco, Berkeley, West Hollywood, Santa Monica, Richmond and Oakland. It goes 55-45 in Los Angeles city, San Jose and Mountain View. These are all rent control jurisdictions where tenants will benefit from repeal.

But San Diego is not passing repeal. The Central Valley? Good luck. Sacramento may have a local rent control measure on the 2018 or 2020 ballot, so repeal could win there. Rural California will go against repeal in droves. As will be the result in all the parts of the state where there is little tenant activism but plenty of realtors and landlords.

Costa-Hawkins is so lucrative for landlords that I could easily see $100 million poured into the anti-repeal campaign. Money will come in from around the world to preserve California’s high rents.

The challenge is daunting, but repeal is possible. A California Democratic Party strongly backing repeal can identify opposition to the initiative with Donald Trump (or Pence if Trump gone). That’s what we did in 1992 to give tenants their first victory in a San Francisco campaign. We made our measure a stand in for Clinton-Bush, and most voters were with the Democrat (I discuss our campaign in The Activist’s Handbook).

Costa-Hawkins enriches the 1% at the expense of everyone else.  California must stop preventing localities from addressing their housing affordability crisis

Randy Shaw is Editor of Beyond Chron. His most recent book is The Tenderloin: Sex, Crime and Resistance in the Heart of San Francisco.

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Randy Shaw

Randy Shaw is the Editor of Beyond Chron and the Director of San Francisco’s Tenderloin Housing Clinic, which publishes Beyond Chron. Shaw is the author of four books on activism, including The Activist's Handbook: Winning Social Change in the 21st Century, and Beyond the Fields: Cesar Chavez, the UFW and the Struggle for Justice in the 21st Century. His new book is The Tenderloin: Sex, Crime and Resistance in the Heart of San Francisco

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