EDITORIAL: Sign of sanity in California

Perhaps there’s hope for California yet.

California doesn’t have Election Day. In a fitting example of how dysfunctional the state is, it has election month as officials slowly tabulate all of its ballots. Even so, a rent control initiative known as Proposition 33 went down in flames. As of Friday, more than 60 percent of voters had rejected it.

Prop 33 would have repealed a law that limits how far local governments can go to limit rent control. Many local officials wanted more power to cap increases in rental costs.

High rents and housing costs are a problem in California. This year, Hans Johnson, a demographer with the Public Policy Institute of California, said unaffordable housing costs are the “dominant factor” in why people leave the state. Last month, Ben Christopher and Manuela Tobias wrote in CalMatters, “The sky-high cost of housing has become part of the state’s national identity.” In a recent article, Moneywise said California has “insanely high living costs.”

None of this should be a surprise, given the state’s embrace of hyper-progressivism. The California regulatory state has become increasingly hostile to private enterprise. Developers in particularly have been neutered.

Rent control would seem to be the obvious solution. And for a small subset of people — those currently renting a dwelling they like and want to stay in — it would provide a tangible benefit. But high rents are a symptom of a deeper problem: a severe shortage of housing.

Rent control would exacerbate shortages. Companies and investors build apartments and homes to make money. If rent control artificially restricts their ability to profit off their investments, they will build fewer apartments and homes. Existing units would be converted to condominiums or homes, further reducing supply.

This idea is so destructive that even California Gov. Gavin Newsom opposed it even though in 2019 he signed a law capping rent increases on some properties.

Nevadans should take note. Democrats and their allies have been trying to push similar schemes here. Last year, legislative Democrats passed Senate Bill 371, which would have allowed local governments to impose rent control. Gov. Joe Lombardo wisely vetoed that proposal, which was similar to Proposition 33.

In 2022, Culinary Local 226 tried to put a rent control measure on the ballot in North Las Vegas. The petition didn’t end up qualifying after the union failed to gather enough signatures.

If Democrats want to lower housing prices, they should stop pursuing measures that even Californians find too extreme. Instead, they should work with Gov. Lombardo to free up more federal land for development.

The long-term way to lower housing prices is to build more housing.