Last year I moved from Orange to Costa Mesa. Nice city. Close to the beach, but cheaper than Huntington Beach. I’m negotiating with the landlord on the rent, which they want to raise if I renew. It’s called the free market.
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But the city might impose its own rent control, on top that of existing state laws, most recently Assembly Bill 1482, the California Tenant Protection Act of 2019. In the bill’s language, it limited rent increases to “5% plus the percentage change in the cost of living … or 10%, whichever is lower.”
At the Feb. 23 City Council meeting, local residents complained about the high rents in the City of the Arts.
“This is now the second meeting in a row where we had people from the community come to speak about that issue,” said Councilmember Manuel Chavez, as reported in the VoiceofOC. “I think it’s important that as we look at the housing element, as we look at housing in Costa Mesa, we have every option on the table, including rent stabilization.”
They should just look north to Santa Ana. As the Register reported, last September the City Council voted 4-3 for measures that, among other things, “Cap rents at 3% annually or 80% of inflation, whichever is less, for buildings built in 1995 or earlier and for mobile home parks established in 1990 or earlier,” as well as tougher “just cause eviction” rules.
The action prompted a lawsuit filed in OC Superior Court Feb. 14 by the Apartment Association of Orange County, which represents 1,875 members and 100,000 rental units in OC. I’ve been to the AAOC’s meetings and most of its members are small, Mom & Pop landlords owning a couple of duplexes to supplement income, often for retirement. They also were hit hard by the COVID eviction moratorium.
Related: Rent control is the terrible idea that won’t go away
“The city is picking winners and losers. This is business, free enterprise. We encourage the city to work within the parameters of the market. But if there’s something else to help renters, we’ll talk with them,” said Dave Cordero, AAOC’s executive director.
The market already is alleviating this problem. The Register’s Jonathan Lansner reported Feb. 8, “California big-city rents fell for the fifth consecutive month in January.” Santa Ana was “down 0.6% in a year” to $2,115 a month, with “Costa Mesa off 3.5% to $2,461.”
It’s also worth noting in 2022 the highest rents in America, according to Fortune Builders, are New York City at $3,260, up 30.4%. And San Francisco, at $2,901, up 9.85%. The Big Apple adopted rent control in 1943 as a “temporary” measure during World War II, which ended in 1945, 78 years ago. The City on the Bay adopted it in 1979 during the Jimmy Carter stagflation era. Rent control obliviously has had the opposite of its intended effect.
“Rent control leads to less maintenance and renovation by landlords,” Raymond Sfeir, director of the A. Gary Anderson Center for Economic Research at Chapman University, told me. “This results in dilapidated housing in many cases, and uninhabitable buildings in others. And it leads to the conversion of apartment complexes to condo buildings. It creates disincentives to build apartment complexes. And it leads to higher rents of units not under rent control due to lack of supply.”
“Supply and demand” is the bed rock of America success. “Find a need and fill it”. Government intervention into this tried and true system of commerce has never been successful. The reason is that a healthy economy is ever changing to adapt to a market. Government regulations are static. We have seen how “equity” works in housing. Human nature dictates when people are given something they did not earn they rarely take care of it. Ergo slums, ghettos and uninhabitable housing.
The free market solution is to create more of something to bring the price down. Our current far left democrat administrations are stupidly piling on onerous regulations and restrictions every day that seriously curb expansion and new construction. Yes! they are truly CRAZY.