Prop 33 Will Hurt Housing
Some might call me a landlord but I think of myself as a housing provider. I’ve acquired and operated residential rental properties, and I’ve also built them from scratch. The government didn’t do this — I did it. The government allowed me to operate in a free market and on a level playing field where I could develop a business and manage the risk.
But that has changed. The government has now commandeered the market and tilted the playing field against me and yet I’m expected to continue to play the game. As if!
And now Prop 33 seeks to further distort the rules such that I would no longer have even a remotely fair chance to succeed as a housing provider.
I understand that rents are high, perhaps too high. But I don’t control the overarching market forces that shape our economy any more than my tenants do. The State of California has decided that it’s okay to control rents, to curtail my rights in evicting bad tenants, to refuse high-risk tenants, and even to restrict my ability to set a security deposit that covers my risk.
In this antagonistic new business environment, I wouldn’t even think to build more housing, which I have done in Santa Barbara, Ventura, and Los Angeles counties. The government and proponents of Prop 33 would do well to remember that it’s private investors who develop the housing supply. Promoting legislation that’s hostile to housing providers while the government is simultaneously promising to promote development of millions of new housing units is contradictory. It begs the question — development of housing by whom? Is the government going to start providing the housing?
I’m sure you’ve seen the ads — the proponents of Prop 33 talk about the big corporate landlords and how they gouge their tenants. I’m sure there are some who fit that description. However, they ignore the fact that the vast majority of rental properties are owned by mom-and-pop operators like me. Far from the stereotypical “bad guy” landlord, I run a business where I collaborate with my tenants: I work hard to provide decent housing in exchange for their hard-earned money. The language and proposed Prop 33 legislation are divisive and built on the premise that I’m a bad guy and my tenants are victims.
Further, almost all the existing and proposed legislation fails to address a need. It offers the benefits of rent control to everyone regardless of need. Oddly, housing is the only area where government is now doing this. They don’t tell restaurants or grocery stores what they can charge. Rather, needs-based programs such as SNAP assess who needs assistance and then provide it. In housing, the Section 8 program assists those need need help, it doesn’t mess with market forces. This is how government should work.
Rental housing is a business. And as any business owner must, I manage my business risk. If Prop 33 passes, there are a lot of housing providers who will simply take their marbles and go home.
I used to make a living as a housing provider. Not anymore and probably never again. Certainly not in California. I saw the handwriting on the wall and have pulled 16 rental units off the market.