Here We Go Again. Another Rent Control Initiative in 2024

Anyone who grocery shopped, went to Target, or visited any major shopping center earlier this year probably ran into an all too familiar sight—and one that raised the alarm bells for many of us.

Signature gatherers—trying to collect signatures for a rent control initiative.

Many of you called AAOC to let us know what you were encountering— most of you were concerned that it was another local attack on the rental housing industry.

Thank you for reaching out, by the way.

The good news—it was not a local effort.

The bad news—it was a statewide effort.

The worse news—the statewide effort was again being driven by Michael Weinstein using AIDS Healthcare Foundation funding.

The irritating news—we knew he would spend whatever Foundation money was necessary to get the initiative qualified.

In late July we received confirmation that the initiative had officially qualified for the November 2024 ballot.

Which is why it is time for a refresher.

What has AAOC done about this effort?

We became aware of this issue last November and immediately initiated conversations with our fellow apartment associations up-and-down the state, as well as with the California Rental

Housing Association (CalRHA)—our state association—and with the National Apartment Association (NAA) —our national association. Together, we have been conferring with business leaders in the state primarily through an organization called the California Business Round Table (CBRT), as well as like-minded organizations such as the Howard Jarvis Taxpayers Association

The groups have been actively developing the campaign against this initiative and crafting the messaging about rent control and the wide-ranging threat its expansion poses. You may have also seen AAOC’s editorials in the past in the Orange County Register, LA Daily News, and the other Southern California News Group papers. Additionally, editorials have started to appear in publications throughout the state about the negative impacts of rent control—most recently the Orange County Register Editorial Board published an editorial calling rent control “A Bad Idea That Won’t Go Away.”

As the campaign develops there will be many opportunities for AAOC members to get involved and join the fight against this ballot initiative.

Our clock has already started...It is time for you to start yours!

Haven’t we done this before?

Yes, and this will be the third time in four elections that Michael Weinstein has cost California business owners— as well as the AIDS patients his foundation is charged with serving—tens of millions of dollars by trying to pass a bad policy that Californian’s do not want. The policy was twice rejected by voters:

• In 2018, as Proposition 10, nearly 60% of voters said NO to rent control; both sides spent a total of $104 million on the campaign.

• In 2020, as Proposition 21, again with 60% of voters saying NO to rent control, both sides spent a total of $123 million on the campaign.

Meanwhile, there is AB 1482, the 2019 legislation that does, in effect, establish rent control on most rental properties statewide.

And, yes, in countless studies, articles and opinion pieces, rent control has been routinely rejected as a policy to pursue. Heck, even NPR reported it doesn’t work

So, why are we going down this road again? Some people refuse to accept the reality that rent control, as a policy, is not wanted, does not work, and creates more problems than it claims to solve.

So, what is the likelihood we will beat this initiative?

Well, if the past is any indication, we should be looking good. We have twice defeated statewide rent control initiatives by a 60–40 split. Additionally, the proponents doubled their spending between 2018 and 2020 and did not move the needle with the voters.

Support also shifted between 2018 and 2020 when several construction trades came out to oppose the 2020 effort. Even Governor Gavin Newsom opposed Proposition 21.

However, there are two major factors to be aware of.

We were only seven months into the Covid-19 pandemic in 2020 when voters rejected Proposition 21. Since then, there has been an onslaught of articles from the state’s major news outlets about soaring rents, struggling renters, homelessness, and evictions without cause being on the rise.

Additionally, between 2018 and 2020 supporters doubled how much they spent on the campaign. Again, the main funding source has been the AIDS Healthcare Foundation whose president, Michael Weinstein, recent said he “…will never give up on expanding rent control.”

OK, so what will this rent control initiative cost us to defeat?

This is where it gets scary.

Over $80 million was spent on each of the last two campaigns to defeat the rent control initiatives. That is a total of over $160 million.

The campaigns to pass the rental control initiatives totaled about $65 million, and approximately 95 percent of the funding came from AIDS Healthcare Foundation—the group whose leader has stated that he will never give up on rent control.

AIDS Healthcare Foundation measures its revenues and expenditures in the Billions—annually.

They have the resources and the commitment to get this initiative passed.

The goal of the rent control opposition is once again to raise at least $80 million to defeat this rental-housing industry-killing initiative.

We have one year to do it.

So, what should we do?

That is the question, isn’t it?

Orange and Riverside Counties represent about 14% of California’s population. AAOC’s members represent many local rental markets and businesses that support and service the rental housing industry.

With an investment of only:

• $5 per unit, per month, plus

• $10 per employee, per month, plus

• $20 per business, per month

AAOC members alone could potentially raise approximately $6.5 million —or about seven percent of what is going to be needed to fight this initiative statewide.

While this may not work for every- one’s budget—it should provide a framework by which we seek to fundraise what is necessary to fight and defeat this initiative.

What AAOC is asking you to do at this point is:

1. Calculate what rent caps below inflation would do to your properties and business operations.

2. Determine how much you are

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