For the first time in recent memory, housing issues jumped to the forefront of the presidential election. And while much as been made of this renewed focus on housing, and rightly so, some of the most pressing issues facing the industry reside at the state and local level this November—including the existential threat of rent control.
Since 2017, 14 states covering more than half of all existing multifamily units have attempted to expand rent control via the state legislature. In 2019, California, Oregon, and New York significantly expanded rent control. Here’s what’s at stake in 2020 at the state level and a look at what the tea leaves are telling us.
Rent Control Resurges as a Key Issue
The greatest threat facing the housing industry—state or otherwise—is yet another California ballot initiative, Proposition 21, that, if passed, would upend the state’s already fragile housing market. For the second election cycle in a row, the well-funded AIDS Healthcare Foundation, led by Michael Weinstein, has qualified a ballot measure that would dismantle portions of California’s Costa-Hawkins Rental Housing Act and open the door for more extreme forms of rent control in the state.
Voters overwhelmingly rejected the measure in 2018, and this second attempt comes on the heels of 2019 legislation that already caps rent increases. You can lend your support and learn more about the initiative at noonprop21.vote.
Beyond California, state lawmakers across the country have prioritized measures related to housing and housing affordability. Prior to the COVID-19 pandemic, rent control measures continued to pop up in multiple state legislatures, though none were adopted in 2020. Once COVID-19 took hold in the U.S., though, governors and lawmakers quickly adopted measures imposing moratoriums on evictions, many of which have been extended.
Big Political Shifts to Watch
Heading into November, Republicans currently hold 21 state government trifectas to Democrats' 15, majority control of 59 state legislative chambers to Democrats’ 39, and control of 26 governors’ offices to Democrats’ 24.
Republicans have long dominated state-level politics, but Democrats have made significant strides over the past few election cycles, a trend that could continue this November. In 2018, Democrats picked up several gubernatorial seats and flipped multiple state legislative chambers. Indeed, since President Trump took office in 2016, Democrats have gained eight governors, from 16 to 24.
Democrats flipped 10 state legislative chambers since President Trump took office, and they have their sights set on more in the 2020 cycle, riding anxieties over COVID-19 and growing dissatisfaction with the president. Experts and analysts have pegged five state legislative chambers as true toss-ups in November:
- Alaska House of Representatives (currently split)
- Arizona State Senate (currently Republican)
- Arizona House of Representatives (currently Republican)
- Minnesota Senate (currently Republican)
- New Hampshire House of Representatives (currently Democrat)
If Democrats prevail in winning the majority in the Minnesota Senate, it will create a new Democratic trifecta in a previously divided state. The Arizona Legislature could end entirely in the Republican column, split chambers, or go entirely Democrat for Republican Gov. Doug Ducey’s final two years in office. New Hampshire could end up with a divided legislature or Democratic majorities to work with likely winner Republican Chris Sununu in his second term.
In Colorado, Illinois, Massachusetts, and Washington, Democrats are poised to preserve majorities in the state legislatures with only Massachusetts having a Republican governor to check any moves toward restrictive housing policies. Keep an eye on where the Minnesota Senate ends up. Should Democrats win the majority there and secure a trifecta for their party, Minnesota could be the next state to see a strong push for rent control.
What Changes in Housing Policy Might Be Ahead
As the COVID-19 crisis continues to unfold, the economy and cost of living issues—including housing—will continue to be front and center in the minds of voters nationwide. Anxieties among the electorate about making rent are increasing even as the economy attempts to recover. It is in this context that candidates at all levels will be making their case to voters.
Housing is a central part of the economic debate that will unfold between now and Election Day, from the top of the ticket all the way down to local races. While federal races are fraught for change, with a tremendous amount of energy working against incumbent Republicans, state gubernatorial and legislative races have more limited opportunities for realignment.
However, large scale Democratic pickups—and more progressive candidates carrying the Democratic banner—could result in increased calls for restrictive housing policies, including extended eviction moratoriums and rent control. Moreover, the statewide ballot initiative in California will be a bellwether for the issue of rent control, with a victory emboldening advocates for the flawed policy in other states.
On the federal level, should Joe Biden ascend to the Oval Office and Democrats gain control of the Senate and retain the House, expect Bernie Sanders- and Alexandria Ocasio-Cortez-style progressives to put increased pressure on him and establishment Democrats to adopt housing policies for which they have long advocated. With families continuing to struggle to make ends meet and housing facing much uncertainty, calls for federal housing reform will be louder than in the past. First up for the Biden administration, however, will likely be reversing some of the executive actions taken by President Trump in his time in office.
If President Trump wins his second election, expect him to deliver on his promises and continue his actions to keep the federal government out of local housing decisions.
Despite projections and endless polling between now and Election Day, these races remain extremely close, even with the intrigue at the top of the ticket and the relative sense of chaos gripping the nation.
Voters are being asked—today—to choose between two parties with starkly different visions for the country, as the extreme wings push for varying positions. Commonsense housing policies that lower the temperature of the debate and prioritize taking care of families in need should be the focus now and when the dust settles.
