The California Property Owners and Farmland Protection Act, which has qualified as Proposition 98 on the June 3 ballot, defines rent control as a form of eminent domain and if enacted would provide that any rent control ordinance in effect prior to January 2007 become essentially invalid. Most of the cash thus far for the initiative has come from landlord and property owners’ groups and the Howard Jarvis Taxpayers Association. Two groups that have signed on to oppose Proposition 98 are the AARP and the League of Women Voters.
There are currently 12 California cities with rent control ordinances, including several of the state’s largest urban centers: San Francisco, Oakland, Los Angeles, San Jose, Beverly Hills, Santa Monica, West Hollywood, Palm Springs, Los Gatos, Hayward, East Palo Alto, and Berkeley. (Thousand Oaks also had a rent control ordinance in effect but has gradually phased it out.)
Because California enacted vacancy decontrol measures in 1995, in communities with rent control, rental units have shown a huge discrepancy in price between vacated units, which landlords have been able to re-price beyond the standard allowable annual rent increase, and units with tenants who have remained put. Expect the number of vacated units (whether they are vacated voluntarily or involuntarily) in those communities to drastically rise if Proposition 98 becomes law.