Last Tuesday June 25th at 1am, Culver City Council decided 4-1 to draft a rent control ordinance. The decision was made according to our most cynical residents’ predictions: the 4-person leftist slate had decided on this well before they were even elected, although they never ran on it. They passed it according to the whims of a tiny organized minority they’d coordinated with ahead of the meeting. They pretended to listen while desperate retirees gave hours of testimonial claiming their multifamily holdings are their retirement.
That government goes along with a vocal leftist minority against the wishes of the greater population should surprise nobody at this point. What’s worrisome about this is that it’s part of a greater push against property and homeowner rights here in California and beyond.
SB50, which eliminates single family zoning in California, tried to pass quietly through the legislature before homeowner groups sounded the alarm and killed it. Prop 10 tried to eliminate Costa Hawkins, which contains a number of homeowner protections. Though it failed 61-39, proponents plan to put it on the ballot again in 2020. Prop 13, which caps CA’s high property taxes, is again being attacked with a “split-roll” initiative, already set to the 2020 ballot. The list goes on and on.
They do this all in the name of “affordable housing,” citing our recent and increasingly desperate vagrancy epidemic, an epidemic which I’ve argued is manufactured by Democrat leadership.
It’s a multi-headed hydra that threatens to overwhelm homeowners and businesses alike. Where is it coming from?
The short answer: These laws aren’t for housing the homeless, but for evicting us.
The longer answer: state Democrats are looking to radically transform the property landscape. Single family homes and multifamily units are to be a thing of the past. The covenant between the state and property owners is to be abolished. Rather than getting to own what we keep, we are only to temporarily manage it for the state. Every one of these bills is pushing in that direction. Its purpose is not to make life better for Californians, but rather make it harder to own a home or business.
Link all these bills, these articles pushing these bills, and the dark money foundations promoting them. It’s really not that hard to follow the money. Some of the biggest developers are aligned with these laws. The picture below is seen on bus benches around Venice Beach. It’s by Dear Neighbor, which is tied to developers. Mercy Housing, another such “inclusive housing” foundation is paid for by some major developers.
Meanwhile, the cost of building a home in California vastly exceeds the cost in other states – exclusive of land. This article gives a good breakdown of all the regulations and fees for any new development in California.
The takeaway is this: regulations are not about protecting the consumer. They are used to create barriers to entry so that only a handful of insiders, who know the secret dance with government, can get their foot in the door. This both increases and ensures their profits at the expense of consumers. We should know this story by now – it also plagues the education and health care sectors.
How does this relate to housing? More regulations on new building increase the price and profits of new development, the spoils of which divided among government and insider developers. If you’ll notice, all the multifamily buildings are built in the 70s or before. Everything past the 90s is generally luxury condos, because it’s the only thing that makes money in California’s regulatory climate. Even when you take out the cost of land, it costs 2-5 times to build a house in California than it does in other states. And when you look at “inclusionary housing” or housing built with public money, the cost skyrockets even higher. With zero transparency.
Ironically, this makes multifamily apartments the only truly affordable housing left in this city. And yet, these proposed laws put undue and unexpected burdens on current home and multifamily holders, forcing them to sell at any price. If rent control passes in Culver City followed by an unfunded soft story mandate (a $50K-$200K project) many more multifamily owners will be forced to sell their buildings to developers.
It’s not just multifamily units that are affected. If such bills continue to pass, namely bills like SB50 or a repeal of Prop 13, even the promise of homeownership as a shield from rising rents will become a mirage.
Good faith progressives should be able to recognize this scenario. It’s a hyperprofit system of modern capitalism, where the state plays the role of primary capitalist, handing out contracts and spoils to a bunch of insiders. Some like to point to China as the poster child for this model. But the truth is more and more of the world is turning to this model. While such a model provides some temporary stability, it never ends well.
The good news is we are still technically a democracy, and homeowners still have enough disposable income to be able to fund and wage a political fight to stop this. Prop 10 failed 61-39 in a state that otherwise tilts 60-40 to Democrats. Progressives and conservatives alike don’t like runaway development or driving out resident homeowners – we can build bridges here.
But if we are to put a stop to this development juggernaut, which destroys as it rebuilds in its own image, we need to be creative and make new political connections. We need popular alliances where the old school ideologies are failing to connect.
Thomas Jefferson said that the yeoman farmer, the independent farmer with his own bit of land and income, and not much else, is the cornerstone to a healthy democracy. While we may not live on farms today, the dynamic hasn’t changed much. The yeoman’s fight two centuries ago is our fight today