By repealing the 1995 Costa-Hawkins Act, the landmark ballot measure Proposition 10 would allow local governments to reclaim the right to change their rent control laws, potentially creating and maintaining affordable housing for millions of tenants across California.
But it won’t pass without a fight: Wealthy investors from Wall Street to Silicon Valley to San Francisco have pumped nearly $60 million into the political arena to keep the state’s housing stock highly profitable for developers and building owners. SF Weekly dug through state campaign donation databases to find which real estate tycoons were donating the most, to make sure your rent remains too damn high.
A reminder: Costa-Hawkins took rent control away from single-family homes altogether and from any units built after 1995 or whenever a local jurisdiction last established it, which means in San Francisco rent control applies only to dwellings built after 1979. The law also allows landlords to raise rents by whatever sums they please once a tenant moves out.
Prop. 10 is a scary proposition for real estate firms and investors, who bank on their state-given right to collect exorbitant sums. Luckily for them, these companies are also allowed to make unlimited campaign contributions, which means they’re outspending the pro-rent control campaign by about $36 million.
Much of that money has gone into a barrage of televisions commercials claiming to be paid for by “a coalition of veterans, seniors, affordable housing providers, social justice groups, taxpayer associations, and labor.”
But a look through the California Secretary of State database of Prop. 10 donations shows the oppositions’ funding overwhelmingly comes from property investors, trust funds, and landlords.
One of these is San Francisco’s largest landlord, Veritas Investments, which currently faces more than 100 tenant lawsuits alleging everything from wrongful evictions to raw sewage spewing from their sinks. Veritas’ in-house leasing organization, RentSFNow, has kicked in $130,000 to defeat the measure.
Other large San Francisco landlord contributions against Prop. 10 include $800,000 from Jackson Square Properties, a real estate investment firm with holdings in eight states. Another $600,000 came down from Flynn Investments founder Russell Flynn, whose company owns more than 3,500 units across the city.
But the biggest Bay Area bucks fighting rent control are coming from Silicon Valley.
San Mateo investment trust Essex Property Trust has donated nearly $2.5 million to defeat Prop. 10, while another San Mateo firm Prometheus Real Estate Group has kicked down an additional $1.5 million against the measure. Marcus & Millichap billionaire co-founder George M. Marcus’ Palo Alto company has also contributed $1.5 million.
Oddly, the largest donors crusading against California rent control are not even from California. Chicago-based trust fund Equity Residential has contributed $3.7 million to fight Prop. 10, while New York private equity firm Blackstone Property Partners has spent at least $3.5 million fighting the measure.
Nevertheless, some well-funded organizations support rent control. Most notably, the AIDS Healthcare Foundation has contributed $10 million to help pass the Affordable Housing Act. (Notably, this is the same controversial AIDS Healthcare Foundation that backed the 2016 mandatory condoms-in-porn measure, and sued the city of San Francisco that same year for classifying their proposed pharmacy as “formula retail.”)
“We know we will be significantly outspent by the opposition, backed by deep-pocketed developers and investors who continue to wreak havoc in the housing markets,” AHF president Michael Weinstein said in a statement. “The greed of these billionaire corporate landlords is causing wide-scale misery for millions of Californians, and the scourge of homelessness will get much worse because the rent is too damned high. The California dream is dying, and only the voters can save it in November.”
But less than three weeks from that November election, it looks like Weinstein will need a miracle. A Public Policy Institute of California poll from late September found Prop. 10 trailing by a 48 to 36 margin, with 16 percent undecided.
The real estate-industrial complex seems to have gotten their money’s worth with those television ads claiming statewide rent control would somehow mean doom for veterans and senior citizens. But be aware: Those ads aren’t paid for by senior citizens. They’re paid for by real estate interests up to their old tricks.
Joe Kukura is an SF Weekly contributor.
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