Hi Reader,

Since 2020, our industry has been faced with eviction bans, new rent control laws, and a wave of legislation chipping away at our rights as property owners. It’s been a full-time job keeping up with all of it. Housing costs have skyrocketed, and it seems like the government needs someone to blame. It’s time we face some hard truths:

1. CA Housing Providers are in Trouble

We are seen as part of the problem. Look at how they name legislation:

In my view, excessive regulation is the root cause of the lack of affordable rentals and high rental prices. They have not created a market where it makes sense financially to build at scale. It’s too expensive, and the process is too lengthy.

I applaud many recent efforts to reduce regulation to encourage more building. There is a debate about the smart way to encourage more building, but we need much more construction to meet demand.

More units are the only way our rental market becomes more stable long term. However, we take one step forward by loosening building regulation, then they add more regulation to how housing providers operate, which takes us two steps back.

You can’t make it so difficult for regular people to rent out their property without many saying forget it. I’ll go be a landlord in another state. This over-regulation reduces supply and drives up rents.

Look at areas with the strictest rent control: New York, San Francisco, Los Angeles—all have the highest rents in the country. The more highly regulated any industry, the more costs go up. Just look at healthcare, finance, and energy industries.

2. The Need for Community Involvement

We can help our community by getting more involved. If we don’t get more involved, our community is in trouble. Not just housing providers, but our whole community, including renters, owners, and small businesses.

Last month, I attended a Rent Control Resurgence event in San Diego County. Housing providers gathered to discuss the upcoming Justice for Renters ballot initiative in November, which aims to repeal Costa-Hawkins. This 1995 bipartisan bill was designed to address housing shortages by preventing local jurisdictions from imposing rent control on houses, condos, or new developments built within the last 15 years.

If repealed, cities and counties could implement any type of rent control on all properties, including houses, condos, and new developments. They could also eliminate Vacancy Decontrol, which allows housing providers to reset rent to market value when a tenant moves out. This means we could be forever bound to government-imposed rent caps, even when properties are vacant.

This is not a partisan issue. This is not a landlord vs. tenant issue. We need to reframe the discussion to, “What’s best for our community?” By community I mean our neighbors, local businesses, renters, everyone.

3. The Case Against Rent Control

Studies show rent control does not work and is bad for the community. Studies from Harvard and Stanford, among others, have shown that rent control leads to less housing quality and reduced availability.

For example, Harvard's Joint Center for Housing Studies explains that while rent control aims to provide affordable housing, it often results in fewer rental properties as fewer landlords make rental units available. This reduces the overall rental supply, increasing rents for new tenants and reducing housing quality as landlords don’t have an incentive to invest in maintenance, with caps on what can be charged (Harvard JCHS).

Similarly, a Stanford study found that while existing tenants under rent control benefited significantly from lower rents, new tenants faced higher rents and a reduced supply of available housing. There is no means test for rent control, meaning someone making $350k a year can stay in a rent-stabilized apartment while lower-income tenants in the market pay higher rates (Stanford GSB).

4. A Call to Action

A few years ago, I took my mom to see Jordan Peterson talk in Canada. He was asked, “Why should people get involved in politics when it’s all corrupt?” He paused for about 10 seconds, then said something I will never forget:

I’m excited to help improve lives by promoting legislation and best practices that take care of our tenants and communities.

I know we all see the world differently. If you have an opinion on this issue, I’d like to hear where you stand. Feel free to reply to this email.

If you would like to support the fight against the repeal of Costa-Hawkins this November, the Southern California Rental Housing Association is leading the charge. You can find out more at the link and donate if you feel called.

One thing I do know, the vast majority of the Housing Providers community shares three common traits:

1. They care about their tenants.
2. They care about their properties.
3. They care about their community.

Working together, I know we can keep San Diego and Orange County a great place to live for future generations.

References:

• ​Harvard Joint Center for Housing Studies on Rent Control​
• ​Stanford Graduate School of Business on Rent Control​

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Steve Welty CEO @ Good Life Property Management DRE #01744610 ​​​​

5252 Balboa Ave #704, San Diego, California 92117
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