The National Association of Realtors is calling the midterm elections a big WIN for the real estate industry nationwide. The association says, realtor-supported candidates from coast-to-coast have won at all levels of government. California’s controversial rent control measure, Proposition 10, was also defeated.
NAR commented on the election the next morning, praising the results of the November 6th midterms. (1) The association said, it supported hundreds of local, state, and federal candidates on both sides of the aisle whose beliefs support the “real estate industry’s goals of strong communities and healthy residential and commercial property markets.”
NAR said, it offered support to more than 250 candidates at the state and local levels, and more than 60 at the federal level. Among those candidates, almost 60 were also Realtors.
California’s Prop 10 Defeated
NAR also made a stand on many issues affecting the real estate industry, including California’s controversial rent control measure, Proposition 10. If the measure passed, it would have repealed the Costa-Hawkins Rental Housing Act and allowed cities to impose rent control on single-family homes, condos, and housing built after 1995.
Overturning the act would have also allowed cities to enact “vacancy control” as part of their rent control ordinances. Currently, landlords with rent-controlled units are allowed to raise the rent to market levels when tenants leave.
There was a lot at stake with this issue because of the housing crisis. Many rent control advocates believe that rent control is the answer, but opponents say it will only discourage investors, and potentially drive them away. That could decrease the amount of housing and put more pressure on already limited rental units. What California needs is more housing, not more rent control.
Fortunately, the measure lost 62% to 38% and the Costa-Hawkins Act will remain in place. According to the Sacramento Bee, it’s the biggest win for the California real estate industry in more than twenty years. (2) But the battle may not be over. Support for the measure was strong from the Bay Area down to Los Angeles County, including the support of L.A. Mayor, Eric Garcetti. It also had the support of the California Democratic Party, the California Teachers Association, and Service Employees International Union.
Randy Shaw of the Tenderloin Housing Clinic in San Francisco told the Sacramento Bee, “It’s extremely difficult to get any tenant legislation through in Sacramento, but now that we have more officials in Los Angeles concerned about tenants, and we are seeing Mayor Eric Garcetti in support, we think that will translate into more pressure on Sacramento.”
And, the post-election pressure is already building. Pro-rent control groups in Sacramento say they will be putting a local measure on the 2020 ballet. Michelle Pariset, of Public Advocates Inc., told the Bee, “We are absolutely moving forward. Our local rental market is out of whack.”
Her group has already gathered signatures for the measure with the help of local unions. It would limit rent increases to a range of 2% to 5% per year. It would also mandate an 18-month lease option for tenants and specify situations that landlords could evict tenants.
Renters vs. Owners at the Ballot Box
Renters may become a powerful force at the ballot box. They are typically less motivated than homeowners to cast their votes, but with so many issues connected to housing, some analysts say the dynamic is changing.
As reported by the Wall Street Journal, rental listing website Apartment List predicted a stronger turn-out among renters for this last election. Apartment List housing economist Christopher Salviati said, “Analysis shows that renters do have significant potential to swing elections and have a distinct set of needs. Thinking of them as a distinct voting coalition is increasing.” (3)
Areas with the highest number of renters as compared to homeowners include Washington, D.C., Nevada, California, New York, and Hawaii. Homeowners still make up the largest share of the eligible voting population, however. According to Apartment List, about 30% are renters and 70% are homeowners. Of those percentages, about half of the renters show up at the ballot box compared to two-thirds of homeowners.
The lack of affordable housing could inspire more and more renters to voice their concerns with their votes. That could have an impact on future elections, whether the ballot measures are good for the housing market, or not.
(2) Prop 10: Sacramento Bee Article
(3) Renters Voting: Wall Street Journal