Rent Control Rally Puts Spotlight On Housing Problem

SACRAMENTO (CBS13) — Construction of new homes may be booming in Sacramento, but state financial analysts say, a typical renter in California pays 50 percent more than rents in other parts of the country.

It's a housing crisis fueling a rent control debate in our state's capital.

Hundreds of housing advocates lined the halls of the state Capitol Thursday, chanting for the repeal of the 1995 Costa-Hawkins rental housing act. The act keeps counties and cities from passing rent control laws.

"Because there are massive amounts of landlords that are suddenly taking rents that are $1,200 and adding $500, $600, $700," said Janice Belson, a renter in Los Angeles.

But with a rent control initiative now heading for the November ballot, even landlords are squaring off.

"Putting us in a position to be housing subsidizers for our entire lives," said Peter Reitz of the Small Property Owners of San Francisco,

"Landlords are doing just fine, you know I'm making a lot of money. All landlords are making a lot of money," said William Chorneau of the Property Owners for Fair Housing.

The issue drew so many people on both sides, they ran out of seats in the hearing room and had five overflow rooms.

"I wouldn't in two years wonder what's going to happen," said Sheri Eddings.

Opponents claim the measure is just too aggressive and would only lead to a drop in new housing construction, chasing builders out of the state, and shrink the current supply.

"Property owners will convert their housing to ownership housing condominiums," one opponent told lawmakers.

We asked a professor to weigh in if rent is too low, would the growth of the economy slow?

"No, because new construction is exempted from rent control," said Peter Dreier professor of public policy at Occidental College.

But longtime tenants say they'll be hit hard, and they want the legislature to protect them before voters go to the polls.

"We want to provide housing. However, if the law is one-sided, it creates a divisive environment just like this," said Wendy Wong from the Bay Area Homeowners Network.

Landlord advocacy groups say they plan to spend tens of millions of dollars to squash this initiative.