Senator Steven Glazer remarks on Senate Floor regarding Assembly Bill 1482 (rent caps)

Senator Glazer made remarks on the Senate floor regarding the rent control component of Assembly Bill 1482. The following is a full transcript of those remarks.

STEVEN GLAZER, Senator from the 7th Senate District: As it has been said by a number of speakers earlier a severe shortage of housing in California is causing rents to rise to levels that are no longer affordable for a large share of our population. This bill promises to slow those increases and prevent unjust evictions, but in my view rent control is not the answer to our housing shortage. While it may be needed in an emergency it might make things worse over the long run.
 

Rent control almost by definition makes the things we need most, construction of new rental housing, less likely than it would otherwise be.  Anytime you reduce the rate of return on an investment you make that investment less attractive and this is true even if new investment is exempted for 15 years as this bill does.

Rent control can also lead to the reduction in the existing rental supply. A 2018 study by Stanford Business School found that after San Francisco adopted rent control in 1994 landlords were more likely to convert their apartments to condos or nudge their tenants out by spending less on maintenance. Others moved into the rental units themselves or rented to family members.

And at a time when we should be targeting our solutions to those most in need rent control helps the millionaire in a $5,000 a month unit even more than it helps the single mom in a $900 a month flat. A more efficient way to help poor renters in a way that does not reduce supply is to give those renters grants or tax credits to help them pay their rent. We do this in health care and we do this with food. We should do more of it with housing.

The Senate has passed my legislation to catch the renter's credit up to inflation after holding it flat for 40 years. I thank you for that and that measure also increased the credit for low-income single moms and dads. That bipartisan idea should a part of any plan to aid renters but that bill was held in the Assembly Appropriations Committee. I hope we can revisit this worthy plan next year. The Assembly also blocked common-sense legislation to give affordable housing the same relief from CEQA, from CEQA litigation that this legislature has given to builders of sports stadiums and arenas. So while rent caps in this bill may provide some short-term relief to those who have a rental unit today we must do more to help low-income renters and that means increasing the supply. Increasing the supply so that rent is not just capped but comes down over time. And I know the author of this legislation understands that and agrees with that, that desire to increase the supply.

Let me give you one factoid and then I'll close. According to the California Economic Forum there are 550 approved housing units in California today. That's right 550,000 approved housing units in California today. With a robust construction schedule that's probably a three year supply. And so you have to ask yourself so what what's happening here, why, why aren't people building? Rents are going up, people making money allegedly, so why aren't we able to why, why isn't that capital being invested in construction? And we all know that's a complex answer to that question whether it's fees, whether it's availability of supplies and cost of labor there's a lot to that. And it's, it's complex and we all know we need to work on it but it has little to do with NIMBYism that saying no to construction as we debate a lot on the floor in that area.

Nevertheless the acute consequences of these large rent increases is a crisis that we can't ignore. Although flawed and short term in its benefit this bill puts a temporary Band-Aid against rent gouging and accordingly I will be supporting it today.