Consumer Federation of California

Emboldened by a national outcry against the use of eminent domain to
seize property for private developments like Brooklyn’s Atlantic Yards,
California landlords have devised an ingenious attack on the state’s
local rent-control laws: Disguising a statewide referendum to ban them
as a measure to reform eminent domain. After the U.S. Supreme Court’s
controversial Kelo v. City of New London ruling in 2005, which allowed
eminent-domain takings for private use, California landlords promoted
Proposition 90, a deceptive proposal to weaken all public regulation of
private property, including rent controls. It lost by a five-point
margin in November 2006.

The landlords waited less than a month before introducing Proposition
98, dubbed the "California Property Owners and Farmland Protection Act"
by its backers and the "Hidden Agendas Scheme" by tenant organizations
and a broad range of other public-interest groups. Similar to
Proposition 90 but even more destructive, Proposition 98 will appear on
the state’s June 3 ballot.

Proposition 98 ostensibly bans the taking of property for private use,
but it defines "taking" to include "limiting the price a private owner
may charge another person to purchase, occupy, or use his or her real
property," and "private use" as "regulation of the ownership,
occupancy, or use of privately owned real property or associated
property rights in order to transfer an economic benefit to one or more
private persons at the expense of another."

Californians for Property Rights Protection, the coalition backing
Proposition 98, includes the Apartment Owners Association of
California, the California Housing Providers Coalition, four
mobile-home landlord associations, and four regional landlord
organizations. UPI reports that landlords have poured nearly $2 million
into the effort, and Nan Brasmer, president of the California Alliance
for Retired Americans, says that over 90 percent of the coalition’s war
chest has come from landlords.

California has no statewide rent-regulation system. A dozen cities
currently have rent-control laws for residential buildings, and 110
localities extend ordinances to mobile home parks. Proposition 98 would
end them all.

Rent controls there are already limited by the 1995 Costa-Hawkins
Rental Housing Act. That state law, which only affects buildings,
exempts all post-1995 units from local rent controls, prohibits cities
from extending their laws to cover previously uncontrolled units,
exempts single-family homes and condominiums, and enables landlords to
set initial rents for new tenants, even if future increases face
regulation: the infamous "decontrol/recontrol" system.

Larry Gross, executive director of the Coalition for Economic Survival,
a Los Angeles tenants’ union and community organization, warns that
Proposition 98 would also attack even the meager rights of uncontrolled
tenants. "What it basically says is that any laws cannot be maintained
that impact the property values of owners," he says. "One could say
that requiring a 60-day eviction notice does that. So it potentially
has some broad-reaching impacts, ones that at this point we can’t even
think about, they’re so dangerous." He also notes that the measure
would hamper efforts to encourage the development of new affordable
housing, such as inclusionary-zoning laws.

Dean Preston, a tenant attorney and organizer, left San Francisco’s
Tenderloin Housing Clinic in September to launch Tenants Together,
California’s only statewide tenant organization. He helped organize a
Save Rent Control Convention in San Francisco on January 19.

"Tenants showed up in large numbers to save rent control," he says.
"The event space was filled to capacity. Tenants are resolved to take
strong action to defeat this dangerous initiative."

A similar event is planned for Los Angeles, Gross says. "We’re holding
a meeting down here in February to brief other organizations on what’s
going on and tie them into the campaign."

Several tenant organizations have joined Eminent Domain Reform Now, a
statewide campaign for Proposition 99, the Homeowner Protection Act.
That initiative would curtail eminent-domain abuse while leaving public
regulations like rent controls in place. This way, Gross says, "voters
who are concerned with eminent domain will have a choice to vote for
something that will truly protect them." The competing propositions are
the only two qualified to appear on the June 3 ballot.

Proposition 98 also threatens environmental, labor, zoning, and other
protections. Because of its massive scale, the campaign opposing it has
grown into what Gross modestly calls "a coalition that is broader than
your typical tenants’ rights or affordable-housing campaign." The bill
has drawn the ire of organizations as diverse as the California
Alliance for Retired Americans, the California League of Conservation
Voters, the Consumer Federation of California,
the League of California Homeowners, the State Building and
Construction Trades Council, and even the California State Association
of Counties and the League of California Cities-all of which also
support Proposition 99. With so many constituents united in a common
cause, the effort to defeat Proposition 98 has breathed new life into
California’s tenant movement. "Rallies have been held in San Francisco
and Los Angeles, and there will be more in these cities and elsewhere
around the state," Preston says. "Tenants and tenant advocates are an
integral part of the grass-roots campaign to defeat this ballot
initiative."

But landlords have deep pockets, and California tenants face a
difficult fight with far-reaching consequences. "Undoubtedly, landlords
throughout the nation are watching this initiative closely," Preston
says. "If [Proposition 98] passes, landlords in other states will view
it as a green light to run similar measures. It is crucial that this
measure be defeated, both to protect California’s tenants and to
prevent similar measures from hurting tenants across the country."

Gross agrees. "I think this is a threat to tenants and rent-control
laws throughout the country," he says. "If the landlords succeed here,
that will empower them to go after tenants everywhere."

Besides, Gross adds, California and New York tenant movements have
always shared close ties. "When we originally fought for rent control
in the mid-1970s," the former New Yorker says, "one of the landlords’
arguments was that all of the tenant leaders fighting for rent control
were from New York. And you know what? They were right!"