Rent Stabilization and Affordable Housing Measures Do Well in US Midterm Elections

Ballot measures to build more affordable housing and protect tenants from soaring rent increases were plentiful and fared well in last week's midterm elections both in the Bay Area and across the U.S., a sign of growing angst over record-high rents exacerbated by inflation and a dearth of available homes.

Voters approved capping rent increases at below inflation in three U.S. cities: Portland, Maine, and Richmond and Santa Monica in California. Another measure was leading in the vote count in Pasadena outside Los Angeles. In Florida, voters in Orange County, which includes Orlando, overwhelmingly passed a rent-stabilization measure, although a court ruling means it's unlikely to go into force.

Most states preempt cities and counties from enacting rent stabilization, the result of lobbying by the real estate industry in the 1970s. Still, in cities accustomed to rent regulation, voters approved stronger rent caps and more tenant protections.

A measure in Richmond to limit how much landlords can raise the rent each year was approved by a 14-point margin: Measure P caps rent increases at 3% annually, or 60% of the local consumer price index (CPI), whichever is lower, building off the city’s existing rent-stabilization ordinance that was passed in 2016.

Gayle McLaughlin, a City Council member who backed the measure, said soaring inflation and an impending recession made the issue of rent control more salient for Richmond voters.

“Our tenant community has a lot of low-income renters, and we need to protect them,” she said. “So this cap on future rent increases … will really give our renters a sense of security, so that they won’t worry about being thrown out on the streets.”

But there were also considerable dissenting voices in Richmond, with nearly 43% of voters opposing Measure P. Derek Barnes, CEO of the East Bay Rental Housing Association, said inflation is hurting landlords, too — especially smaller landlords who don’t have deep pockets.

“Things like this [measure] really do make it difficult for owner-operators to run rental properties,” he said. “The rent increase cap just makes it extremely difficult to run a business, especially when expenses have increased exponentially.”

There were also dozens of proposals nationwide on the Nov. 8 ballot raising money for and authorizing construction of affordable housing, said Diane Yentel, president and CEO of the National Low Income Housing Coalition. Many passed.

“Housing is a winning campaign issue. It's one that voters show up for and it’s one that should cause policymakers at all levels to act,” said Yentel, adding that even a loss can be a win.

“The act of organizing itself builds strength, it builds power, and it builds connections and it builds momentum,” she said.

In Oakland, more than 73% of voters approved and passed Measure U for the issuance of $850 million in general obligation bonds, of which $350 million would be used for the purchase, renovation or construction of affordable housing. Oakland voters also approved Measure V, which expands eviction protections for tenants in RVs and new units and removes failure to execute a new lease as a just cause for eviction, while also prohibiting the eviction of educators and children during the academic school year. That measure passed with a 66% majority.

But not all ballot measures passed in the Bay Area. In Berkeley, Measure L — which would have issued $650 million in general obligation bonds to fund city services, including $200 million for affordable housing — didn't get the necessary two-thirds vote needed to pass, even though 57% of voters did approve the measure.

Calls for more affordable homes and policies to keep tenants housed have been growing as homelessness increases even in places outside coastal urban centers such as San Francisco and Los Angeles. Moreover, teachers, police officers and other public servants say they cannot afford to live in the places where they work, resulting in nightmare commutes and staffing shortages.

Backers say rent control policies are needed to curb sharp increases that put tenants at risk of eviction. They say protections are especially needed now as more corporations snap up rental housing for profit. As of 2018, the U.S. Census Bureau found businesses owned nearly half of rental units.

“The market is out of whack. The government needs to step in and regulate it so there can be stability,” said Leah Simon-Weisberg, a tenants rights attorney and chair of the rent board in Berkeley.

Opponents nationwide say rent control increases costs for landlords, the majority of whom are mom-and-pop operations with a handful of units each. Restricting rents will spur disinvestment in rental stock and discourage construction of affordable housing.

“Decades of empirical research have shown this policy does not help the underlying cause of the housing shortage that we have now. If anything, it makes the housing challenge more acute,” said Ben Harrold, public policy manager at the National Apartment Association.

In Portland, Maine, 55% of voters approved a measure to slim down an existing rent cap, from 100% of the consumer price index to 70%. The proposal also dictates a host of other tenant protections, such as limiting security deposits to one month’s rent and requiring 90 days' notice for a rent increase or lease termination.

A ballot measure in Pasadena to cap annual rent increases at 75% of the consumer price index had more than 52% of the vote late Tuesday, and the campaign declared victory. The campaign's finance coordinator, Ryan Bell, said organizers went all-out to reach voters, but also, the timing was right.

“The pandemic really made it clear that people who are renting their housing are insecure by definition. Their housing could be taken away from them in some cities for no cause, and a massive rent increase is functionally an eviction,” he said. “There’s just more and more stories.”

Meanwhile, the rent cap overwhelmingly approved by voters in Orange County, Florida, is on hold. A court ruled it didn't meet what it acknowledged was an “extremely high bar" set by a state law that requires a housing emergency be identified before a rent cap can be put in place.

Nearly 60% of voters approved the measure after rents that jumped 25% between 2020 and 2021 and another double-digit increase this year. The Board of County Commissioners in Orange County was scheduled to meet Thursday to decide whether to appeal.

Tenant advocates and landlords do agree on the need for more affordable housing, and cities and counties in Arizona, Maryland, Missouri, North Carolina, Texas and Ohio were among those that approved bond measures for more units, according to the National Low Income Housing Coalition.

In Colorado, voters approved a sweeping measure to set aside roughly $300 million a year for programs that curb homelessness and promote affordable housing. But in Denver, where Zillow data shows that median rental prices jumped $600 in two years, 58% of voters rejected a $12 million proposal to expand free legal counsel for all tenants facing eviction.

The eviction fund would have been financed by a $75 annual fee on landlords.

For Drew Hamrick, vice president of government affairs for the Apartment Association of Metro Denver, the opposing argument “that resonated the most was that this $12 million tax was going to end up being paid for by the consumer regardless of what political outlook you have.”