California rent control measure will hurt affordable housing: MBA
If California voters approve Proposition 10 in November, the ramifications will be felt on the state's affordable housing, according to the Mortgage Bankers Association.
The fear with Prop 10 centers around new construction and available affordable housing getting hampered. A restricted inventory would ultimately cause both home prices and rents to rise.
"Proposition 10 would have a chilling effect on the ability of middle-class families to find affordable housing in what is already one of the nation's most costly states for rental housing and homeownership," the MBA said in a press release.
The ballot initiative would repeal California's Costa-Hawkins Rental Housing Act, giving local governments ordinance over rent control. Previously exempt housing would then be subject to rent control, while municipal vacancy restrictions would be removed, allowing regulators to dictate how much single-family homeowners could charge to rent out a room.
"Make no mistake, Proposition 10 will not lead to more affordable housing. Instead, it will remove any incentive to develop new affordable housing units and lead to higher housing costs in California's already expensive market. This will harm the entire real estate finance industry in general and especially multifamily mortgage lenders. Moreover, if Proposition 10 succeeds, it is certain to be emulated by other states," the MBA's statement continued.
The latest poll from the Public Policy Institute of California shows 48% of voters oppose Prop 10, while 36% said they are in favor and 16% are undecided. Voters will get to decide the fate of Prop 10 on Election Day Nov. 6.