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California’s Rental Market at a Crossroads: Why Property Owners Should Act on Prop 33 and 34

There will be two propositions in the November elections that could potentially make history for California’s rental housing and healthcare systems. Particularly relevant to property owners and managers is the impact that these propositions could bring. Whether it’s new compliance requirements, changes in property values, or rental availability, these propositions can change everything. Thus, it behooves property owners to stay updated, alert, and prepared.


Proposition 33: The Risk of Rent Control Expansion

Proposition 33 is marketed as the “Justice for Renters Act,” positioned as a solution to California’s housing crisis. However, while it claims to support renters, this measure would affect both property owners and tenants if it passes. Proposition 33 would permit local governments to impose strict rent control policies, voiding the longstanding protections set by the Costa-Hawkins Rental Housing Act, which currently bars cities from applying rent control on properties built after 1995 and allows property owners to set market rates between tenants. Dismantling these protections, Proposition 33 creates a regulatory landscape that could deter investment in the rental market.

Impact on New Completions and Supply

Cities such as San Francisco, Los Angeles, and Santa Monica have already begun planning strict rent control measures for newer properties, which would go into effect if Proposition 33 passes. Indefinite rent limits discourage developers and investors from building or investing in properties under strict rent control policies. This would further exacerbate California’s housing shortage as fewer rental units are built or brought to market. With reduced investment, renters would face fewer options and potentially higher prices due to increased demand.

Local Government Control: A Pluralistic Regulatory Landscape

One of the most concerning aspects of Proposition 33 is the level of power it grants to local governments, potentially resulting in a fragmented regulatory landscape. Property owners with properties across different cities would face the challenge of complying with varying and possibly contradictory local laws, complicating operational management and compliance. This inconsistency might lead some owners to consider selling properties as the cost of dealing with these burdens becomes too great.


How Proposition 33 Affects Both Renters and Property Owners

Cities like New York, which have implemented strict rent control, show the potential unintended consequences for tenants, such as reduced property maintenance due to limited investment, which leads to deteriorating building conditions. Furthermore, rent control often tightens the market by discouraging investment in new rental housing, resulting in fewer available units and increased rental prices for non-controlled properties.

Fiscal Limitations and Maintenance Issues

For property owners, Proposition 33’s strict rent control measures would mean limited income to cover costs like repairs, taxes, and inflation. This financial strain often leads to reduced property upkeep, as owners struggle to maintain buildings without adequate revenue. Poor maintenance results in property value loss, potentially creating subpar living conditions for tenants.

Deregulation of Maintenance and Development Exacerbates California’s Housing Shortage

Lower investment in maintenance and development under rent control has broad implications for California’s housing market. With fewer new rental units available and increased demand for quality housing, the market becomes more competitive, driving up the price of non-controlled properties. Proposition 33 could lead to a less stable, less accessible rental market, ultimately disadvantaging both renters and owners.


Proposition 34: Protecting Healthcare Resources for Patient Care

In stark contrast to Proposition 33, Proposition 34 addresses a loophole that currently allows healthcare funds to be diverted for political causes. Proposition 34 protects healthcare funding by ensuring that 98% of resources go directly toward patient care, preventing these funds from being used for unrelated agendas.

Why Healthcare Funding Matters to Communities

Healthcare funding impacts the stability and vitality of communities across California. Strong healthcare systems contribute to healthier neighborhoods, giving residents greater access to essential services. This stability benefits everyone, including property owners and renters. When healthcare resources are used as intended—focused directly on patient care—the quality of life improves within communities.

The Relationship Between Healthcare Security and Property Values

For property owners, Proposition 34 supports healthcare fund security, indirectly enhancing property values and community development. Healthy communities with robust healthcare services attract stable, long-term tenants and make rental properties more desirable. Supporting Proposition 34 serves both property owners and renters by keeping healthcare resources within the communities that rely on them.


Proposition 33: A Well-Funded Campaign

Unlike previous rent control propositions, Proposition 33 has over $100 million in funding, making it one of the most organized and formidable campaigns to date. Past initiatives like Prop 10 (2018) and Prop 21 (2020) were defeated through grassroots efforts, but Proposition 33’s significant funding poses a new challenge that requires property owners to take action.

The Role of Grassroots Advocacy

To counter Proposition 33’s financial backing, property owners must engage in grassroots advocacy. Contributions to campaigns, informing Californians, and participating in outreach efforts can help spread the word about the potential dangers of Proposition 33. Learn more about how to advocate against Prop 33 by visiting NoOnProp33.com.


What’s at Stake if Proposition 33 Passes?

Passage of Proposition 33 could negatively impact California’s rental market. Rent control as proposed would limit how much property owners could charge, affecting their ability to cover maintenance and operational costs, ultimately lowering the quality of available rental units. As income becomes restricted, fewer improvements can be made, leading to a cycle where property values decline and tenants face limited choices.

Decreased Supply and Increased Cost for Non-Controlled Units

With a restricted supply of affordable, well-maintained units, demand for non-rent-controlled properties is likely to increase, driving up prices for units not under rent control and placing additional stress on California’s already tight rental market. Property owners and renters alike may feel the squeeze as the competitive housing market becomes even more challenging.

Voting in Defense of Property Owners’ Rights

As the U.S. Supreme Court has shown limited interest in challenging rent control laws—recently declining to review cases from New York—voting remains a key way for property owners to protect their rights and support rental market stability. Voting “No” on Proposition 33 and “Yes” on Proposition 34 can help protect long-standing property rights and preserve a stable rental environment.


How Can Property Owners Make a Difference? Vote No on Prop 33, Yes on Prop 34

For the sake of California’s rental market and healthcare resources, property owners and stakeholders are encouraged to step up this election cycle. Here are key actions to take:

  • Vote on Election Day: Voting “No” on Proposition 33 and “Yes” on Proposition 34 helps protect property rights and ensures healthcare resources remain focused on patient care.
  • Support Grassroots Organizing: Assisting anti-Proposition 33 grassroots organizations can amplify public education and awareness efforts. For healthcare advocacy, visit YesOnProp34.com to learn more.
  • Spread the Word: Educating others about the potential consequences of Proposition 33 increases awareness and encourages informed voting.
  • Stay Informed: Following updates from credible sources, such as the California Apartment Association (CAA), ensures property owners are informed and engaged.

Ready to Protect Your Investment? Harbor Property Management is Here to Help

During times of regulatory uncertainty, having a reliable partner can make all the difference. Harbor Property Management is here to navigate California’s rental market complexities on your behalf, with services including tenant screening, lease management, property maintenance, and regulatory compliance. Whether you own a single property or a portfolio, we offer the expertise you need to ensure profitability, compliance, and appeal.

Contact Harbor Property Management today to learn how we can help you protect your investment and succeed in California’s dynamic rental market.