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California rent control measure trails in early returns

SACRAMENTO, Calif. (AP) – A measure to allow more rent control in California was trailing significantly in early returns Tuesday.

Proposition 10 was losing by roughly 20 percentage points with more than 2.9 million ballots counted.

The initiative that would allow cities to expand rent control generated more than $100 million in campaign contributions, making it one of the most costly and controversial items on the ballot as California faces a massive housing shortage and climbing rents.

Proposition 10 would overturn a state law that bars rent control on apartments built after 1995, single-family homes and condominiums. The same state law also prevents cities and counties from telling landlords what they can charge new tenants.

More than a dozen California cities, including Los Angeles and San Francisco, already have some rent control on older properties. If passed, Proposition 10 would take effect later this year and give local governments more flexibility to enact or expand rent control.

It would automatically restore an old Berkeley law that limits what landlords can charge new tenants in that city. Other cities are already discussing their own rent control proposals if it passes.

Supporters say more rent control would protect low-income people from being priced out of their homes. Opponents say it would lower real estate values, further decreasing the state’s housing supply by discouraging construction.

A poll released last month by the nonpartisan Public Policy Institute of California found 60 percent of likely voters planned to vote against the measure, giving it long odds heading into Election Day.

Proposition 10 supporters include the state Democratic party, the California Teachers Association, and Vermont Sen. Bernie Sanders, a popular progressive. The AIDS Healthcare Foundation, a Los Angeles-based nonprofit known for backing controversial ballot measures, contributed $23 million of the $25 million raised to pass the measure.

Both candidates for governor oppose the initiative, along with the NAACP’s California conference and the California Chamber of Commerce. The lion’s share of funding for the $75 million opposition campaign came from the real estate industry. The California Association of Realtors was the largest donor, followed by Essex Property Trust and investment firm Blackstone.

The nonpartisan Legislative Analyst’s Office said Proposition 10 would lower the value of rental properties. Economic research generally shows that rent control benefits some individual renters but overall limits supply and raises rents because it decreases incentives to build.

California has a disproportionately high rate of homelessness, and nearly a third of California renters spend more than half their income on rent, according to the state’s housing agency.

Californians will also weigh two bond measures aimed at providing more affordable housing.

Proposition 1 would authorize $4 billion in general obligation bonds for low-income and veteran housing, which would be repaid over time with interest. It was winning by a slim margin in early returns with 52 percent of votes in support.

Proposition 2 would allocate $2 billion in bond funding to house mentally ill homeless people. Lawmakers approved the bonds in 2016, planning to repay them with funds from a tax on millionaires that voters approved in 2004. But the funds became tied up in court because of a lawsuit that argues voters approved the tax to fund mental health services, not housing. Lawmakers and the governor decided to resolve the legal dispute by taking the issue to voters. It was winning in early returns with 59 percent.

Associated Press

Associated Press

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