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Nearly 800,000 Californians behind on rent, with over $5B accumulated rental debts

  As of early May, more than 768,000 households in California were behind on rent payments, with the accumulated rental debts  totaling more...

 As of early May, more than 768,000 households in California were behind on rent payments, with the accumulated rental debts totaling more than $5 billion.

California continues to suffer from some of the most expensive rent prices in the nation, and local organizers warn that the ending of eviction moratoriums could make the situation worse and put approximately 721,000 children at risk of homelessness.

According to real estate listing company Zillow, as of July 21, average rent prices in California are $2,902 across all sizes and property types. In places perceived as high value like Orange, San Diego, Santa Clara and San Francisco counties, homes with three bedrooms and space to accommodate a family could cost at least $4,000 a month.

In Los Angeles, residents behind on their rent payments are facing a deadline of Aug. 1 to repay all rental debt accrued between March 2020 and September 2021. All rent accrued from October 2021 to Jan. 31, 2023 is due by February 2024.  

This situation isn't limited to the state's largest cities. Even more inland cities like Bakersfield, Fresno, Riverside and Visalia – once thought to be cheaper options when compared to their pricier counterparts – are no longer a refuge from California's housing affordability crisis. Average rents in these places have surged by as much as 40 percent since 2020.

For these inland and small California cities and towns, the rental spikes are being caused by the surge of new residents competing for housing with locals. Many of these new residents are usually educated, coastal white-collar workers who work remotely. This means that not only are these people potentially displacing locals, they aren't even working for local businesses and contributing to the local economy.

Jeff Tucker, a senior economist at Zillow, noted that the inland rental crunch has made California's housing affordability crisis much worse. Cities in regions like the Central Valley that used to enjoy a healthy "affordability advantage" over coastal urban centers are no longer great havens.

"People have been moving toward that more affordable option when they don't have anywhere else in California that they can afford," said Tucker.

Californians to vote on rent control in 2024

The only so-called solution California's activists see for spiraling rent is to institute statewide rent control. This is why, for the third time in four elections, Californians will vote on a referendum allowing rent control.

According to the office of California's secretary of state, an initiative led by the AIDS Healthcare Foundation (AHF) has garnered enough signatures for a referendum on November 2024 that would repeal the Costa-Hawkins Rental Housing Act of 1995.

The Costa-Hawkins Act prevents cities and counties from limiting initial rental rents and prevents limiting rent increases for existing tenants in residential properties – including condos and single-family homes – first occupied after February 1995.

This is the third time in four elections that California activists have put forward a proposition to repeal the rent control ban. Proposition 10 in 2018 failed by 19 points. In 2020, Proposition 21 was rejected by 20 points.

"The situation has gotten so extreme and dire and catastrophic," claimed AHF head Michael Weinstein, who also acts as the chief financial backer of all three rent control campaigns to date. "We can never give up, that's the bottom line."

Along with repealing Costa-Hawkins, the proposition would also allow local governments "to maintain, enact or expand residential rent control" however they see fit.

State lawmakers have attempted to counter this rent control push with a state law that puts a cap on rent hikes of no more than five to 10 percent plus inflation. Activists claim this ceiling is far too high.

California landlords and business groups are also prepared to defeat this proposal.

"In recent years, we joined a broad coalition of pro-housing groups in soundly defeating similar measures from Michael Weinstein and AHF … and we will prepare to fight this latest proposition," said California Apartment Association Director of Communications Michael Nemeth.

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