Several measures that could impact the apartment industry are on the ballot this election. Apartment industry advocates are tracking more than a dozen ballot initiatives in jurisdictions across the country.
“Housing is the No. 1 political issue this election,” says Karl Eckhart, vice president of state and local government affairs for the National Association of Home Builders. “We have all got to get together and make the solution.”
Interest in housing ballot initiatives has grown since the millennium as the cost for housing has relentlessly increased, says Eckhart.
Rent Control on the Ballot … Again
In California, voters will consider for the third election in a row whether local governments should be allowed to expand their existing rent control laws or create new ones.
“We're certainly very concerned that would open the floodgates,” says Nicole Upano, assistant vice president of housing policy and regulatory affairs for the National Apartment Association. “They're contemplating removing what’s left of the limitations on local power.”
Proposition 33 would repeal the Costa-Hawkins Rental Housing Act of 1995, which would give local jurisdictions even more power to regulate rents in the state. Lawmakers in California created a statewide rent control law in 2019, with landlords not able to increase rents more than 5% plus the increase in cost of living annually.
“It allows for the market to keep building—but it does have rent control at the back end,” says Eckhart. “That was done by compromise with all the different parties in the Legislature.”
Advocates for rent control clearly think the state law is not strong enough and are trying again. Similar ballot initiatives to allow towns and cities to toughen their own rent control laws were defeated in both 2020 and 2022 with more than 55% voting against.
“Not overwhelming, but that’s a pretty good majority,” says Eckhart. The housing industry spent more than $50 million to defeat each of those past ballot initiatives. This year, it is spending about $35 million. “The real way to get around rent control is to have more homes built, and then everybody can find the house that they can afford,” he adds.
Some municipalities, including San Francisco, have already passed rent control laws that will come into effect if Proposition 33 passes.
In several other jurisdictions in California, new rent control initiatives are on the ballot. If they pass, as well as Proposition 33, these measures will also snap into effect. Some would create tougher, local rent controls or eviction protections in municipalities that include Berkeley, Larkspur, San Anselmo, and Santa Ana. In other municipalities like Fairfax, ballot initiatives would replace existing, tough rent controls with the more moderate rent control statute signed by state lawmakers last year.
Voters in Hoboken, New Jersey, will decide another kind of ballot initiative relating to rent control. While Hoboken already has a rent control law, this ballot initiative would allow landlords to increase the rent of a vacant apartment to a market rent without limitation—in exchange for a contribution to the city’s Affordable Housing Trust Fund of $2,500 per unit.
Affordable Housing Is on the Ballot, Too
- In Albany, California, Measure R would create a new, supplemental business license tax on residential rental businesses to help pay for rental assistance, code enforcement, and legal support;.
- In Baltimore, Question A would authorize the mayor and City Council to borrow up to $20 million for the planning, developing, executing, and making operative their Affordable Housing Program, including the acquisition of development sites;
- In Charlotte, North Carolina, the Housing Bond Measure would allow the city to issue a $100 million affordable housing bond that would be paid for by an increase in city property taxes;
- In Los Angeles County, Measure A would replace an existing quarter-cent sales tax with a new half-cent sales tax to support programs including affordable housing;
- In Oroville, California, Measure N would approve the construction of a proposed 18-unit low-income housing property;
- In Rhode Island, Question 3 would allow the state to issue $120 million in bonds to make housing more available in the state. The bond proceeds would provide $80 million for low- and moderate-income housing, $10 million for community revitalization projects, $20 million for low-, moderate-, and middle-income housing for homeownership, $5 million for site acquisition for supportive housing, $4 million for housing-related infrastructure, and $1 million for municipal planning; and
- In San Francisco, Proposition G would appropriate at least $8.25 million per year to provide rental subsidies to extremely low-income affordable housing.
Other Measures That Affect Real Estate Are Also on the Ballot
- Also in California, Proposition 2 would allow the state to issue a $10 billion bond to modernize, renovate, and repair public institutions. Most of the proceeds ($8.5 billion) would pay to fix up K-to-2 schools, and the rest ($1.5 billion) would go to community colleges. “That's something developers want in large part because right now in most areas if you're going to build several multifamily units or a subdivision, the developer builds the school, and that cost is then borne by the consumer,” says Eckhart;
- Another ballot initiative in California, Proposition 5, would make it easier for local jurisdictions to issue bonds for affordable housing and public infrastructure projects. Currently these local bond issues need to be approved by two-thirds (66.67%) of voters. If voters pass Proposition 5, proposals to issue bonds would just need 55% of the vote. Though affordable housing developers may benefit, other advocates for the apartment industry, like NAA, worry that more bond measures will eventually require higher property taxes to pay for them;
- In North Dakota, Measure 4 would eliminate property taxes in the state. Property taxes are a significant cost for apartment owners, but the measure is likely to eventually hurt developers. "The state of North Dakota will eventually look at the alternative of increasing sales taxes, which will increase the cost of building in the state," according to Eckhart, which is supporting the North Dakota Builders Association in its fight against the measure;
- In Oregon, Measure 118 would create a new business tax of 3% on any gross receipts of $25 million or more. According to NAHB, which has provided support Home Builders of Oregon in fighting the measure, it could jeopardize small businesses as well as raise prices and cut jobs; and
- In Washington state, the Washington 2066 ballot initiative would allow many to have a chance to keep their gas stoves by overturning a recent ban on natural gas. The initiative is backed by the Building Industry Association of Washington and a large coalition that includes NAHB.
