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Big money opposes repeal of Costa-Hawkins, returning real rent control to California

May 30, 2018

by Lynda Carson

Alameda County social worker Venus Zuhura Noble speaks at an April 23 rally about her many clients who cannot afford to live in in the city they work in because of housing costs at Oscar Grant Plaza in Oakland. Supporters of a California ballot initiative to lift statewide restrictions on rent control staged rallies in Oakland, Sacramento and Los Angeles as part of an effort to repeal the state’s Costa Hawkins Rental Housing Act. – Photo: Laura A. Oda, Bay Area News Group

With so much at stake for renters campaigning to repeal the notorious Costa-Hawkins Rental Housing Act, it should be no surprise that wealthy landlords and property owners are already spending a fortune to fight back against the efforts to repeal it. Costa-Hawkins is the 1995 law that severely limits cities’ rent control options.

Rent control and just cause eviction protections are the only fair and humane ways to slow down greedy landlords and profiteering realtors and developers from gouging renters with never ending rent increases and unjust evictions, displacing renters from their communities and adding to the already dire affordable housing crisis in California.

During late April of 2018, the campaign to repeal Costa-Hawkins submitted over 565,000 signatures to place the Affordable Housing Act on the November 2018 ballot, which, if passed, would repeal the draconian Costa-Hawkins Act. Only 365,880 valid signatures were needed.

Wealthy landlords, realtors and developers have teamed up against renters, and the competing campaigns are gearing up for a huge battle to come.

Campaign opposing repeal of Costa-Hawkins

The California Apartment Association (CAA) created the committee known as Californians for Responsible Housing for their campaign to fight back against repeal of the Costa-Hawkins Act. According to BallotPedia, $4,039,279 has been contributed to the CAA-backed committee, including $165,803 as in-kind services.

In contrast, the campaign to repeal the Costa-Hawkins Act has received contributions of only $2,095,000 and $70,491 as in-kind services, a total of $2,165,491 in campaign contributions.

These are the top five donors to the CAA-backed Californians for Responsible Housing:

  1. As of May 9, 2018, Essex Property Trust Inc. and affiliated entities contributed $2,267,330. In recent years, Essex also made a $100,000 donation to CAA to fight rent control ballot measures in California.
  2. Equity Residential contributed $429,900 and also donated $100,000 against rent control measures in California Equity is a wealthy Chicago firm owned by billionaire Sam Zell. Zell contributed $100,000 to the failed Prop 98 initiative in 2008 that would have ended rent control in California.
  3. Avalonbay Communities, Inc., contributed $356,880.
  4. Prometheus Real Estate Group contributed $196,800 and an additional $150,000 to fight rent control. Prometheus is owned by a billionaire family.
  5. And the Spieker Companies, Inc., owned by 69-year-old Tod Spieker of Atherton, contributed $189,950. The wealthy landlord resides in a home valued at $12,587,532, and opposes protection of renters by rent control or just cause eviction ordinances.

During 2016, Essex Property Trust gave $100,000 to the CAA to suppress the vote against rent control ballot measures in Bay Area cities. Essex has been accused of illegal payroll practices and has been sued in a class action lawsuit at a number of properties in Fremont in recent years that resulted in a $650,000 settlement. Additionally, Essex and its subsidiaries have been sued for personal injury and property damage due to mold problems in some of their apartments and other properties.

The Prometheus Real Estate Group, owned by Jackie Diller Salfier and the Diller family, contributed $150,000 or more to the CAA for its campaigns against rent control ballot measures. Prometheus has also allegedly exposed them to asbestos without warning them, in violation of Prop 65. The big landlord also displaced 400 people at a mobile home park and has been sued for exposing people to bed bugs, raw sewage and other habitability hazards in their apartments.

Richard “Tod” Spieker contributed $50,000 to the CAA and the campaigns against the rent control ballot measures in the Bay Area during recent years. Tod Spieker has allegedly been involved in mass evictions and has been in trouble with HUD over habitability issues in some of his apartments.

In recent years, Woodmont Real Estate Services contributed $85,000 to the CAA in opposition to local rent control measures, and G.W. Williams Co. contributed $45,000. Both were involved in the mass evictions that occurred at the 73-unit Park Royal apartments in San Mateo. Woodmont is listed among contributors to the CAA-backed Californians for Responsible Housing.

Other contributors to CAA’s Californians for Responsible Housing include Castle Creek Management Co. Inc., 100 Van Ness Associates LLC, James Hirsch, Harrison Fremont Holdings LLC, Van Ness Hayes Associates LLC, Ernest C.J. Leung, Mark Kessel, UDR Inc., Prime Administration LLC and affiliated entities, Kennedy Wilson Multifamily, Woodmont Real Estate Services including aggregated contributions, Lennar Homes of California and affiliated entities, EGB II LLC, Aimco Corporate, Legacy Partners and affiliated entities, Irvin Grant, Robert Jabour, Mayten Manor Corp., Newport Apartments Corp., Peppertree Village Corp., Georgia Lane Town Homes Inc., Ilene Weinreb, The Felix Group LLC, Votenow Action and California Business Roundtable Issues PAC.

Some of the California Apartment Association’s officers and directors are deeply involved in the campaign against the tenant activists campaigning to repeal the Costa-Hawkins Act, including the companies they are involved with that are contributors to the CAA backed Californians for Responsible Housing.

According to their latest 2016 990 tax filing, the California Apartment Association (CAA) had gross receipts of $7,911,623. After subtracting their liabilities from their assets, the CAA had a fund balance or net assets of $5,870,158. In 2016, Thomas K. Bannon, CEO of the CAA, raked in $326,212, plus an additional $26,062 in other compensation from the organization.

Although the CAA claims to represent the ethical members of the rental housing industry, it appears that many of its members are ethically challenged.

In addition to the huge political battle building toward a showdown on the November ballot over repeal of the Costa-Hawkins Act, there are presently rent control campaigns underway in 10 California cities.

Lynda Carson may be reached at tenantsrule@yahoo.com.

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2 thoughts on “Big money opposes repeal of Costa-Hawkins, returning real rent control to California

  1. ray

    Little money is fighting it too. Really,do you think owners of single family homes will rent out when they go away for a month or year if they are going to have to hire a lawyer, etc when they want to move back in after their long vacation or one year job elsewhere? And, do you think any developer will build apartments knowing that when done and rented, they can only raise the rent 1 or 2 percent a year? No more apts building, fewer existing places for rent = even higher rents since fewer things to rent. … this helps some people who already have low rent, but anyone looking to rent, will have a worse time. Get real.

    Reply
  2. Ned

    The effort to repeal Costa Hawkins is misguided. First, it has the effect of punishing small property owners, e.g., a pair of senior people renting out a second house to supplement social security income. This is immoral. Second, it has the effect of preventing owners from ever renting out their properties. This is perverse.

    I am a lawyer who has won an award for outstanding service helping low-income tenants in tenant-landlord disputes. Repealing Costa Hawkins will NOT help the low-income tenants.

    Reply

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