By Sam Houston
The election is less than a month away so we have very little time to help Proposition 10 pass in November. I want to make sure that everyone else in Davis who wants no new housing projects encourages everyone to vote Yes on Proposition 10, so I thought I would remind everyone of things to bring up with neighbors they see downtown or at the Farmers Market.
As mentioned in the Davis Vanguard on Friday a policy brief released by the Haas Institute recently. The Haas Institute’s vision is for a Fair and Inclusive Society. Nicole Montojo, Stephen Barton and Eli Moore wrote the policy brief. Nicole has a master’s degree in City Planning and a bachelor’s degree in Sociology. Dr. Barton has a Ph.D in City & Regional Planning. Eli Moore has a Masters in Geography and International Relations. The focus of the policy brief is to point out that the cost of rent in California is too high when compared to household incomes. In addition, the high cost in rent negatively effects black and Hispanic households more than white households. On page 23 of the policy, the paper states “We all, homeowners and tenants alike, contribute to making California a desirable place to live in. Our rental housing market is structured so that private landlords take this publicly-created value for private profit, charging tenants higher rent for their contribution.” “This allows real estate investors to exact an enormous transfer of wealth from people who do not own real estate to people who do.” To make up for this wealth transfer they propose that the wealthy real estate investors should be required to provide rentals at below market rates, i.e. rent control. By citing, a paper written by two City Planners and a Geographer that focuses on the emotional aspects of the effects of expensive housing it is easier to get people to agree to rent control. The main reason for this is that everyone can agree that the effects of high rents are horrible and this needs to change. Rents are too expensive! Black and Hispanic households do not own their homes at the same levels as white households. Renters pay out a higher percentage of their income for housing then homeowners leaving less money for other needs. Things are getting worse. When you explain this to your neighbor, they will all agree that things need to change. That is when you tell them to vote YES on Prop 10.
One thing that you want to make sure you do not mention any research studies done by any economists. These studies tend to tell a different story than the emotional ones. Unfortunately, they tend to use statistical information from cities that have rent control to show the actual effects on renters. If you can, mention that rent control has never really been studied so that people do not try and locate these economic based studies.
One of the most recent studies of rent control was written and published by Rebecca Diamond, Tim McQuade and Franklin Qian from Stanford. Dr. Diamond has a PhD in Economics from Harvard. Dr. McQuade also has a PhD in Economics from Harvard. Franklin is a PhD student at Stanford. This paper focuses on the rental market in San Francisco and the effects that rent control have had on it after a 1994 ballot measure passed putting rent control on multifamily homes built before 1980. What they found was that the rental supply of rent-controlled buildings were reduced by 25% compared to their 1994 levels, as units were converted to condominiums or TIC. They also stated in the paper that due to rent control rents increased 7% more than they would have without rent control. Obviously, this contradicts the whole argument for rent control in the first place, to provide more rental housing at affordable prices, so make sure to avoid talking about this study or people are going to vote against Prop 10.
Dr. Kenneth Rosen, PhD Economies, Massachusetts Institute Technology, a UC Berkley Economics professor also published a paper, The Case for Preserving Costa Hawkins. He says the same things that all economists say. The demand for housing in California is higher than the supply of housing available in California and the only way to change that is to build more housing. (We homeowners do not want that!) He mentions that with rent control developers will not build anything and that property owners will take homes off the rental market. He also agrees with the Stanford study that rent control will cause rents to increase, not decrease.
If someone mentions Dr. Rosen’s study, just bring the conversation back to the emotional aspects of the housing shortage and away from the actual data on rent control. The emotional aspect is much easier to understand than economic data. The theory of supply and demand just voodoo economics anyway! (Or, at least you can tell your neighbors that.) Remember our goal is to enact rent control so developers are unable to build any new housing in Davis and the number of renters in Davis decreases. So go out there and tell everyone you know to vote YES on Proposition 10 this November.
Sam Houston is a Davis resident