By Ken Magri
By the middle of October Californians start feeling the agony of frequent mailers and political advertisements for ballot propositions. But even the sharpest voter can get confused by the way these voter initiatives are presented.
This appears to be the case with the supporters of ballot propositions 33 and 34, who have created some confusion while asking for your votes.
Proposition 33 proponents would like a “yes” vote on their initiative and a “no” vote on Proposition 34. The reverse is true for Proposition 34 supporters who want a “yes” for their initiative and a “no” on 33.
What should voters know about these two California initiatives?
Proposition 33
Proposition 33 is a rent control initiative going up for approval for the third consecutive election. It aims to end a rental housing act from 1995 called Costa-Hawkins, which stops cities and counties from limiting the initial rental rate landlords may change for new tenants.
According to the proposition’s text, the measure “would repeal that state law and would prohibit the state from limiting the ability of cities and counties to maintain, enact, or expand residential rent-control ordinances.”
Supporters feel that the 29-year old Costa-Hawkins Act is detrimental to solving our current housing crisis. They charge that it allows landlords to raise the rent with each new lease, increasing the cost of housing and driving more Californians into homelessness.
“The law is outdated,” said affordable housing consultant Diane Luther. “Local communities should be able to decide for themselves what is needed to protect renters while also being fair to landlords,” she said.
”There are over 186,000 people who are homeless in the State of California,” said Susie Shannon, Policy Director for the non-profit Housing Is A Human Right at a September Capital Weekly forum. “A Zillow study showed that for every five percent rent increase in Los Angeles, another 2,000 people become homeless,” she said.
Under Proposition 33, local governments will only enact rent control measures only if they so choose. The initiative does not mandate statewide rent control.
“We understand that mom and pop landlords have invested their life savings into their buildings and can identify with the plight of their tenants. The California Constitution guarantees them a reasonable rate of return,” says the argument for Yes on 33 in the Official California Voter Information Guide. “But it is the billionaire corporate landlords who are calling the shots and causing skyrocketing rents.”
Opponents of Proposition 33 claim that ending Costa-Hawkins would also overturn over 100 housing laws across the state without guaranteeing any new housing will be built. “It undermines the strongest statewide rent control law in the nation signed by Governor Newsom and has no protections for renters,” they argue in the voter information guide.
Proposition 33 opponents also claim that past rent-control efforts in Berkeley and Santa Monica actually reduced the amount of available housing, especially for low-income renters. “Housing advocates tend to line up on both sides of the rent control issue,” said Luther. “Some advocates believe that rent control will reduce incentives for market developers to build rental housing, while others don’t.”
The California Legislative Analyst’s estimate of fiscal impact is that Proposition 33 would reduce property tax revenues “of at least tens of millions of dollars annually due to likely expansion of rent control in some communities.”
Proposition 34
This proposition addresses an AIDS funding issue, by stopping certain non-profit organizations from using their revenue-stream from drug sales for political advocacy. But it is extremely narrow in its definition of which non-profits.
Proposition 34 appears to have been written to target one existing organization, the non-profit AIDS Healthcare Foundation (AHF), which operates HIV care and prescription services and affordable housing apartments.
The proposition’s wording mentions “certain participants” as the targets of the initiative, but AHF is the only organization that currently fits its definition. AHF co-founder and President Michael Weinstein is the primary force behind Proposition 33 and California’s two previous rent control ballot initiatives.
Proposition 34 supporters maintain that Weinstein (although not specifically named) is unfairly using part of his foundation’s revenues to fund political initiatives and other projects that steer money away from patient care.
Primarily funded by the California Apartment Association, Proposition 34 would change how those revenues are spent, requiring AHF to “spend 98% of revenues from federal discount prescription drug program on direct patient care.”
This would end AHF’s ability to use some of its funds for political advocacy.
AHF generates operating revenue through the 340B program passed by Congress. It allows hospitals and qualified non-profits to purchase AIDS drugs at a discount. The foundation resells the drugs to outpatients at market prices and uses a portion of that money for political advocacy like rent control.
But Proposition 34 supporters say that AHF also spends money buying luxury condominiums and promoting pop concerts and that don’t fit the mission statement. They also accuse AHF of being “slumlords” at the affordable housing sites it operates.
The proposition mandates that AHF renegotiate its drug prices or face losing its non-profit status. “Patient money should go to patients,” said Nathan Click, a public affairs advocate representing “Yes on 34” at the Capital Weekly forum. “Congress passed the 340B program and said ‘You shouldn’t charge taxpayers this up-charge,’” said Click.
Opponents of Proposition 34 call it a “revenge initiative” aimed at AHF only because of Michael Weinstein. They defend AHF’s drug-selling funding stream, contending that Proposition 34 is not about fair drug pricing, but about ending Weinstein’s repeated rent-control efforts which are part of AHF’s mission statement.
The Legislative Analyst’s fiscal impact estimate on 34 is that it would increase state costs, “likely in the millions of dollars annually, to enforce new rules on certain health care entities.”
And what about Proposition 5?
While not intertwined with 33 and 34, Proposition 5 also deals with
affordable housing. It asks voters to allow a 55% majority when passing local bond measures for affordable housing and infrastructure. The current percentage for passing bond measures is two-thirds. Proposition 5 supporters feel the lower threshold would make it easier to fund new affordable housing projects. Without larger statewide funding, Diane Luther said Proposition 5 “is very important because it is our only hope for significant revenue to build affordable housing for the next few years.”
The Legislative Analyst’s estimate on Proposition 5 is that the financial impact depends on future decisions by voters and local governments, but that any new borrowing would be paid for with property tax increases.
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