Rent Control and the Law of Unintended Consequences

By Mike Madrid

While cities can be very innovative and creative in finding public policy solutions, by and large local governments are a pretty conservative bunch. More often than not cities follow  the example set by others and don’t often stick their necks out when it comes to breaking new ground in controversial areas.  So it’s with some fascination that we watch the current rent control measure being circulated by the Howard Jarvis Taxpayer Association and funded in large part by the mobile home park and apartment owners lobbies.

Often times, city policy changes happen as a result of the town next door experiencing success or a city manager following the lead of another city manager who has blazed the trail before them. Controversy, it seems isn’t part of the city DNA. New ideas for city policies are often in reaction to public opinion or the demands of the voting public – and perhaps, that is as it should be.

The Jarvis measure would prevent cities from passing rent control ordinances, long the bane of apartment owners and trailer park operators. Masked under the guise of eminent domain reform, the clear objectives of those underwriting the campaign are to sneak the elimination of rent control under the watch of an unwilling public.

The problem with this strategy is twofold:  First, there will clearly be some backlash to this in the unlikely event that they are successful. While it’s getting harder and harder to fool an untrusting electorate through the ballot process – this attempt borders on insanity. It’s begging for a more draconian ballot measure once the public realizes that they’ve had the wool pulled over their eyes. I mean,  after all – since when did any but the most blighted trailer parks and dilapidated apartment owners ever worry about eminent domain reform? They’re worried about rent control and the public will find out.

The second scenario, and more likely, is that a multi-million dollar effort will be launched to defeat the Howard Jarvis measure attacking it on its two main weaknesses – the fact that it destroys California’s need to build water storage and delivery for a wanting public and the fact that eliminating rent control is not politically popular (has anyone asked the Howard Jarvis organization how this polls? My guess is the donors haven’t even seen how badly this trails, or aren’t sophisticated enough to ask – after all, eliminating rent control hasn’t been popular in this state for generation and it isn’t as if living in California has gotten easier for seniors, the poor and those on a fixed income).

The likelihood of losing is great for the proponents but the unintended consequences are greater. More than once cities have identified a trend and localized it for their own community’s purposes (think “tipplers taxes” on bar drinks, smoking ordinances, urban growth boundaries, even fees on plastic grocery bags for goodness sakes!)

So why would apartment and mobile home park owners want to encourage a multi-million dollar barrage of ads demeaning their industry and likely starting a wild new round of rent control ordinances in the hundreds of cities throughout California? Beats me.

Proponents are literally paying for a debate where they are virtually guaranteed to lose if they win – and lose more than they imagined if they lose.