Will California Abolish Rent Control in 2008

by Michael J. O’Connor

California thinkingThe California Apartment Association (CAA) is actively deliberating what position to take regarding the Howard Jarvis Taxpayers Association’s proposed ballot measure: California Property Owners and Farmland Protection Act (CPOFPA) commonly known as the Jarvis Eminent Domain and Rent Control Initiative.

This measure, if it should qualify for the California June 2008 ballot, is intended to limit both eminent domain and rent control in California.

The results of a poll commissioned by the CAA found the following results of more than 800 likely voters, Democrats and Republicans, homeowners and renters:

  • 41% would support the measure
  • 52% would oppose the measure
  • 55% support rent control and do not believe it should be eliminated

Among those voters who oppose the measure:

  • 58% oppose due to concerns that the bill limits water storage/delivery options
  • 62% oppose believing that rent control laws protect vulnerable segments of society

When provided a choice:

  • 68% would support an eminent domain initiative that does not eliminate rent control

Generally, ballot measures that garner at least 60% support in early polling have a reasonable shot at success. Clearly this measure is a long-shot.

The California Apartment Association has historically taken a thoughtful approach towards housing issues presented to voters. As this measure has not yet qualified for the ballot, the Association is adhering to its long-held policy of not taking a position — yet. But this measure is SURE to be a political hot button if it does qualify and the Association knows that regardless of the measure’s success there will be far-reaching consequences.

The Board is weighing the following options in anticipation of the measure being on the ballot:

  • Support – A reasonable position given the impact that draconian rent control measures in certain cities has had on property owners. But this position will also cost the Association much in both terms of money and goodwill.
  • Neutral – A safe course but leaves the Association open to criticism from both sides.
  • Oppose – Will garner significant alienation from members and allies who really want rent control abolished. But given the relatively low early support, this option may be the most realistic.

In addition to these positions, the CAA is also looking at anoppose but offer other alternatives” position. In so doing, the CAA may be able to offer up new ideas and garner support among groups who would not normally be aligned with property owners.

What are your views on this issue? Is abolition of rent control a good idea? Should cities be able to continue to implement drastic measures to maintain tight rent control? Or are there some better ideas somewhere in the middle that will help everyone? The CAA will be sending its members a formal questionnaire on the subject and as a member of the Association myself, I am interested in your thoughts on this issue.

Michael J. O’Connor is a real estate broker specializing in short sale & REO properties in Mira Loma, CA. As a graduate of the prestigious University of Michigan MBA program, consistently ranked as a top business school in the country, Michael provides clients with top-notch business strategies to acquire or sell distressed properties. To learn more visit http://activerain.com/toomora.

American Apartment Owners Association offers discounts on products and services related to your commercial housing investment including REAL ESTATE FORMS, tenant debt collection, tenant background checks, insurance and financing. Find out more at www.joinaaoa.org.

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