Council Candidates Discuss Housing at Yolo County Realtors Forum – Part 2 – Rent Control

Most of the candidates showed up to a morning candidate’s forum at the Odd Fellows Hall, put on by the Yolo County Association of Realtors.  Ezra Beeman however, was unable to make it, and Colin Walsh sat in for the second time for him.  Larry Guenther also could not make it.

The second question was about localized rent control legislation.

Colin Walsh (for Ezra Beeman): Stanford University recently released a study on rent control that found that it benefited current renters at the expense of future renters.  It works to reduce the supply of rental housing – so if you’re there before the rent control sets in – you’re a winner.  If you come in after, you’re a loser.  I’m talking about this whether or not there’s Costa-Hawkins in place.  Ezra is an economist, and because of the economic principles involved, is opposed to rent control.

Gloria Partida: I agree if you are in a unit before the rent control goes in, then you are a winner and if you’re out, you’re a loser.  We turn over so quickly in Davis that it doesn’t make any sense here.  I see a lot of losers here over rent control.  But I do believe that we have to something to help the renters that are in Davis.  My cousin is having to move out of his unit because they’ve raised the rent and as he’s looking for another place to rent, they’re asking for each adult in the house to make three times the rent.  That really makes it tough for families.  If you are a couple of college students, then I could see putting that limitation on.  But if you’re a family and maybe have one person who stays home half the time with kids, and you’re asking each adult to cover the rent three times, it makes it impossible.  We do have to look at the burdens that we are placing on our renters in town.

Mark West:  I absolutely oppose rent control.  I was a student at Berkeley when it was implemented there.  Overnight, the double-occupancy market rate apartments became single occupancy bedrooms.  So it cut the inventory in half, raising the rent – doubling the rent for people in the process of looking for places to stay.  Berkeley also spends $5 million a year managing their rent control program – Davis doesn’t have $5 million that it can throw away on a program like that.  It’s just silly.  What we need to do is just increase our inventory – by having more inventory rents will stabilize, start coming down. That would benefit everybody.  Rent control is just bad policy.

Dan Carson:  I also think rent control is a bad idea.  I’m completely sympathetic to the students and the working poor in this town who are struggling to pay their rent.  But I don’t think rent control is the answer either in the short term or the long term.  In the short term, the cost for all of that regulation will get passed through from the landlords to the tenants.  You could see significant short-term rent increases.  In the longer term if we don’t build additional housing, because rent control will deter that construction of additional rental housing, you could see very serious disruption of the market.  As a newspaper man in my youth I covered the rent control debate in San Diego, I went up to Santa Monica to see what happened up there and it was rental housing chaos.  Including folks illegally demolishing apartment units in the middle of the night because the local authorities weren’t going to allow demolition permits.  They lost housing.  It isn’t the solution we need.  Rent control will diminish property values.  For local governments, property taxes are an extremely important source of revenue, that means in the long term we could lose the money we need to support our city government if rent control was enacted.  It’s a bad approach.

Linda Deos: I don’t see how rent control is going to “fix” our problem of housing here in Davis.  The issue here is we don’t have enough housing.  We don’t have places for people
to live.  Anything that is going to create disincentives to create the housing, I’m – I don’t think is the right direction to be going into.  I fully understand the frustrations of trying to make rent and trying to keep up with rent going up and up and up.  It’s happening not only here in Davis, it’s happening regionally from the Bay Area up through Sacramento and all around rents are going up.  A lot of that has to do with the lack of housing stock.  I don’t just mean single family homes.  I mean multi-unit housing stock.  We need to look into ways we can incentivize that going forward.  We’re never going to be able to solve our housing crisis, whatever we may or may not be able to do.  People still like California, people are moving here.  People want to be here.  We need to provide housing for folks – that’s why I want to push for smaller homes being built – again the affordable housing by design.  We need to look at creative ways to create more housing.  Rent control I don’t think is the way to do that.

Eric Gudz:  Two reasons I can’t support rent control at this time.  One being the concerns, first and foremost for students – the ones who would be mostly impacted by the turnover rate.  As a renter myself, as somebody who has had to endure the astronomical increases in rent the last couple years in the city, as somebody who has had to pay a $4000 security deposit for a two-bedroom.  There’s definitely a crisis, definitely a problem.  It’s to a point where we’re losing like scores and scores of families that are no longer interested in helping out and being a part of the Davis community.  It’s definitely a serious issue, but until we fix Costa-Hawkins or until we repeal Costa-Hawkins, until we address some of the other fundamental issues with some of our larger housing dynamics and policy at the State Capitol, that program will simply not benefit our community in the long term.  Thinking about rent stabilization and some of the ways we can control rents with our commercial real estate.  Obviously we need to be thinking about our housing stock where people are living, but we also have a very serious issue downtown with some of the rents skyrocketing.  That’s putting a lot of pressure on our turnover.  It’s preventing a lot of small businesses to survive and thrive downtown.  I think we need to be taking a serious look at that as well.

Mary Jo Bryan: When I started looking at rent control a bit more, I thought of Prop. 13.  I had a Prop. 13 house, but I stayed living in my house for over 40 years.  I really benefit from it.  The family that moved in after me is paying a huge amount of property tax.  This is the kind of way about how rent control also works.  We have such a turnover in students, it just would be horrible for an increasing rent on them.  What the landlord gave up, he’ll get back.  I’m also thinking of our housing market and housing stock.  Basically we have allowed so many student dorms into Davis proper – not on campus – and that restricts a multi-unit family kind of housing.  I am happy to hear Will Arnold say, let’s get away from that a little bit.  A little bit too late – my feeling.  I had to struggle with Sterling Apartments and the demolition of FamiliesFirst for a student dorm apartments.  I think that we have to get away (from) that, and the next proposal that comes up will probably be Pacific Standard, and that will be back to traditional multi-unit apartments and I’m happy to vote for that.

Luis Rios:  Davis, we pride ourselves on being a quality community.  I always receive emails from students, let me just read this quickly.  This is from a UC Davis student: ‘Every time rent goes up, in Davis, students have to scramble for new housing and financial pressures increase.  IF Davis wants to keep its welcoming reputation, we need to (e)nsure all members of the community are having their needs met.  This does not mean the university should not be held accountable.  But the city should have more motivation to cooperate particularly regarding housing.’  We need to elect the right people.  We can’t be going into the same direction year after year after year.  We need smart housing.  We need to build more homes.  I know a lot of young families who (rent) apartments because they want their children to be educated in our public schools.  Now they’re raising money to buy a starter home.  Or maybe they rent a home and then move onto a starter home.  That’s been the process for years and years.  We’ve got to think smart and build.  Rent control may not be the right answer right now but we need to elect the right people and build homes for everybody – middle class people, working class families, and grow the right way.

—David M. Greenwald reporting

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About The Author

David Greenwald is the founder, editor, and executive director of the Davis Vanguard. He founded the Vanguard in 2006. David Greenwald moved to Davis in 1996 to attend Graduate School at UC Davis in Political Science. He lives in South Davis with his wife Cecilia Escamilla Greenwald and three children.

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  1. Jim Hoch

    Is it just my imagination or does Luis never, ever, answer a question? At least this time it was not boyscouts and homeless which seems to be his default answer.

  2. Michael Bisch

    It appears many of the candidates have reversed their positions on rent control…after having received endorsements, in part, based on their previous positions.

      1. Keith O

        Yes, if memory serves me right you never would admit it but to me it was quite apparent.  There’s at least one candidate that was also for rent control too before he was against it even though he never admitted it either.

  3. Jim Hoch

    “they’re asking for each adult in the house to make three times the rent.” Is this a typo or did she really say this? Typically they want the adults to make three time the rent together, not separately.

    1. Ken A

      It was probably a typo since if “each” person needed to make “three times the rent” you would need to find three single guys ALL making over $108K a year to rent a home in Davis for $3K/month (vs. just three guys making ~$18/hr each if the TOTAL income needed to be three times the rent)…

  4. Ron

    I realize that I’m decidedly in the minority regarding rent control (and I agree that Davis is not ready for it, at this time).  I’m also aware of the drawbacks.  But, it is extremely (almost “outrageously”) effective, at keeping rents in check for long-term renters in expensive areas.  I’ve witnessed this, myself.

    In concept, it functions in a manner that’s at least somewhat similar to Proposition 13, for property owners. And, if property taxes aren’t allowed to rise faster than the percentage allowed by Proposition 13, then there’s less justification to pass those particular costs onto renters.

    And, it’s certainly better (and more effective) than the “build-your-way” to affordability approach (which isn’t working anywhere in California), unless the goal is continuous/endless development (and forever attempting to accommodate market demand).

      1. Ken A

        In SF they spend over $8 million a year running the rent control board…

        Ron is correct that Proposition 13 “does not necessarily translate into savings for renters”, but if Proposition 13 were to end for rental properties and almost every landlord in the state had a big increase in property taxes it would “almost certainly translate in to rent increases for renters”…

      2. Ron

        David:  In an earlier Vanguard article, I recall calculating the administrative cost for each rent-controlled unit (in Berkeley?), and it didn’t amount to much.  (Especially when considering the differences between the market rate, vs. controlled rate for each unit.)

        I believe there’s an effort underway, to try to repeal Costa Hawkins.  If that occurs, there may be significant ramifications/opportunities to implement more widespread (and effective) rent control.

        For sure, it’s kept rent “outrageously” controlled, for the person that I’m familiar with (whom I will now refer to as “Captain Underpants”).  The Captain’s rent is likely much lower than the property tax (alone) would be, if the property was sold and reassessed. It’s worked that way for many others, as well.

        1. Ron

          Again, I’m aware of the controversy and arguments (and I’m not really looking to engage).  Regardless, here’s an interesting article, from a member of the LA Tenants Union:

          “Before Costa-Hawkins, Santa Monica had what’s called vacancy control – there were limits on how much of an increase the next tenant would get. As a study by Santa Monica’s Rent Board has shown, before Costa Hawkins, 82% of that city’s rent-stabilized apartments were affordable to low-income households. A decade after Costa-Hawkins, only 14% remained affordable.”

          If the state becomes dominated by renters, perhaps this effort will pick up steam. It’s apparently already on the ballot, for Fall.

        2. Ron

          I’m gathering that sufficient signatures have been submitted, but perhaps not yet verified (to determine if this will appear on the November ballot).

          Regardless, I found another article with this interesting quote:

          “And given the politics and the tenant movements’ alliance with the building trades on many issues, there is no way that new construction will be brought under rent control. But the fact that this will never happen will not stop landlords from flooding the airwaves claiming that it could happen if Costa-Hawkins is repealed.”


        3. Ron

          Pretty sure that this comment wouldn’t have gone over well, at the realtor’s forum referenced in the article above.  (And, perhaps not that well with some Vanguard commenters, either.)  🙂

          “The same industry that’s trying to push upon you that building more luxury or market-rate housing is a solution to everything is the same industry that went to Sacramento and made certain that you couldn’t apply rent control, and you couldn’t regulate the rents.”

  5. Alan Miller

    I believe that rents may be higher in Davis than they would have been were it not for all the talk of rent control.  No landlord wants to be caught with their pants down with a low rent when it goes into effect, so many may have jumped a year or two ahead on rent increases to cover this possibility.

    1. Mark West

      I honestly doubt this is true. Rent Control is a logistics problem for landlords but with the allowable rent reset upon turnover, most landlords will do just fine financially. There really isn’t a huge incentive to jack up rents in advance since even with rent control they will be able to push rents up to the top of the market everytime a tenant moves out. It is renters who will ultimately lose out with rent control as there will be little incentive to create new apartment inventory or maintain that inventory which is subject to control. Residents of Davis also lose out due to the cost of the new bureaucracy needed to manage the program and the general decay of the rental stock.

      1. Howard P

        You make good points, for units that have high turnover… some don’t… we had a SF rental tenant for 10 years… since it was a home we had lived in, and only needed to cover mortgage, taxes, maintenance etc. … we only adjusted for City utilities… it was not a “business”… even so, had we gotten wind of a rent control ordinance, we’d have bumped it up ~ 10-15%… just saying…

        We sold that house a couple of years ago to a family who are owner-occupants… we own no other rental properties, so I guess we don’t care.

        Those who own rental properties, with the purpose of income, might feel very differently… that is real…

      2. Alan Miller

        MW, may be true if you own multiple units and it averages out — which means when there is turnover the market rate is higher to balance those frozen.  But suppose you own one unit and the tenant never moves out?  You are screwed.  I have heard stories of landlords doing desperate things to try to get tenants to move out, and tenants doing desperate things to hang on to the current rent.  It’s a matter of the solution becoming worse than the problem.

        1. Ron

          In reference to my comments above, I have sometimes wondered if “Captain Underpants” might mysteriously “disappear”, one of these days.  🙂

          If Costa Hawkins is repealed, this (attempting to remove tenants who benefit from rent control) will no longer be an issue.  (With “vacancy control”, there would no longer be any incentive to remove such tenants.  This would also benefit short-term student renters, as well.)

          A repeal of Costa Hawkins would be a game-changer, throughout the state.

          Of course, a repeal would not mandate such changes, but would simply allow cities to do so.

          1. David Greenwald

            We haven’t got to it yet, but later in forum, six or seven of the candidates opposed changing Costa Hawkins.

        2. Howard P

          Have no evidence, ut have heard there is a prop 13-like game played… for commercial properties, it is not unheard of a consortitium owning a property… 1/4 leaves, new 1/4 comes in… no reassessment… this contiues until none of the original owners is involved, yet no reassessment…

          Heard that game has been used on rent-controlled leases… 3 folk rent the unit… one drops out, new one added… rent stays the same… connect the dots… not much the landlord can do about it, unless they structured the lease to prevent that… maybe one of the reasons why “rent-by-the-bed” concept is taking traction, big time… even when the project is “rent-controlled”, landlord can up the rate when one lessee leaves, at least for that “bed”…

        3. Ken A

          For all properties (not just commercial) the Prop 13 tax basis only changes when there is a change in “control”of a property.  It happens but it is probably less than 1 out of every 10,000 sales are of a minority interest in a property (since people that want to own real estate but not have any control tend to buy REIT stocks not invest in partnerships without GAAP statements).

          For rent control (at least in SF) the rent will say low (only increasing by 60% of CPI per year until the last original tenant admits they have moved out (if the original tenants sublease the place for thousands more per month or turn the unit in to an AirBnB business but still say they live there the rent will only go up after the landlord spends a couple years and a couple grand to document that they really don’t live there).

        4. Jim Hoch

          “We haven’t got to it yet, but later in forum, six or seven of the candidates opposed changing Costa Hawkins.”

          Was the 7th one stoned?

  6. Richard McCann

    Wow, I was glad to see that there was a mass “coming to our senses” on the part of the candidates. Rent control delivers few sustainable benefits, and is wholly unworkable in a college-town setting.

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