- 61.6% of California voters rejected Prop. 33, preventing local rent control laws from expanding and preserving the Costa-Hawkins Rental Housing Act.
- The California Apartment Association and other real estate groups raised $66M to oppose Prop. 33, arguing it would worsen the housing crisis.
- Prop 34, which restricts the AIDS Healthcare Foundation from using federal health funds for political initiatives, passed with 51.5%, curbing AHF’s ability to finance future rent control.
According to The Real Deal, California’s rejection of Proposition 33 maintains current statewide limits on rent control under the Costa-Hawkins Rental Housing Act, which prevents rent caps on single-family homes, vacant units, and apartments built after 1995.
Too Close For Comfort
Had it passed, Prop. 33 would have allowed California cities and counties to enforce stricter rent controls. However, landlords and real estate associations argued the measure would harm investment in new apartments and worsen California’s housing affordability crisis.
In response, voters pushed back, with 61.6% voting against the measure based on nearly complete reporting.
CRE Rallies Together
Real estate organizations mobilized significant resources to defeat Prop. 33, raising $66M in campaign funds, including major contributions from the California Apartment Association and state Realtor groups.
They essentially outspent Prop. 33’s supporters, led mainly by the AIDS Healthcare Foundation. Each prior attempt to expand rent control at the state level also failed after real estate groups raised concerns about potential negative impacts on housing development and affordability.
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Prop 34 Passes
In a related move, voters approved Prop. 34, which restricts the AIDS Healthcare Foundation’s ability to use revenue from a federal drug program for non-healthcare-related purposes. This effectively limits the organization’s ability to fund future rent control measures.
This outcome represents a strategic victory for the California Apartment Association, which sponsored Prop. 34 to curb repeated rent control efforts funded by AHF.
Looking Forward
With Prop. 33 denied and Prop. 34 passed, multifamily property owners and developers may face fewer threats of statewide rent control initiatives.
The vote suggests California’s electorate remains cautious about expanding rent control as a solution to housing affordability, prioritizing incentives for new development over strict rent caps in hopes of addressing the state’s growing housing shortage.
