Proposition 33 is a Disaster For Small Investors and Affordable Housing by Extending Rent Control.

Introduction [Music] hi Ron Benning real estate investment expert in today's video I'm going to talk about what I perceive to be one of the biggest threats to California landlords and affordable housing that has come along in California in many years as long as I can remember being in the business you cannot not afford to sit on the sidelines and let the proposed changes take place most people including many property managers I've talked about this with don't even know about this proposed proposition that is on the ballot this November if you want to understand a bit more about this big threat which is California Proposition 33 make sure you watch this video Until the End if you want to keep up with what's happening in the greater Sacramento small investment market and important changes that are regularly happening you're not already subscribed please subscribe to my channel now as an investor and licensed real Why I am against Proposition 33 estate broker for over 30 years I think i' am in a position where I've seen housing shortages booms Buss and the unended consequen quences of state and local government regulations and their often disastrous unintended consequences often these unintended consequences are the result of legislators that just don't have a basic understanding of Economics or the free market system that they are trying to force these utopian Concepts on however well-meaning they are a good deal of what I'm about to say is my opinion I'd encourage you to research inv validate or invalidate the things I'm about to tell you I have a link down below to a nonpartisan analysis of the proposition you owe it to yourself to understand what this proposition is about and to hopefully help defeat this proposition this November also if you agree with the points I'm making this video please share it as widely as possible because we need all the help we can to make sure this proposition is defeated there is no Possible Justifications for Proposition 33 doubt that the cost of housing in California has skyrocketed over the past 10 years particularly for renters this is the emotional hook that the people put in this proposition on the ballot are using before moving on to The Real Reasons for a Shortage of Affordable Housing what the proposition says it is important to understand how other regulations and laws have already impacted the availability of affordable housing in California there are a variety of reasons that rents have skyrocketed in California some of these reasons were unavoidable but I believe that the majority of the reasons rents have went up so much are the result of misguided policies enacted through the California legislature and by ballot initiatives as legislators have made new regulations many of these regulations have had the direct or indirect impact on the supply of affordable housing so why are rents going up so fast well one there's just a shortage of available houses or multif family properties for rent High interest rates have made new investment purchases much more expensive forcing landlords when possible to charge higher rents just to break even the higher interest rates have also made development of new properties more expensive building supplies have went way up in large part due to the increase of cost of gas building permits in many local jurisdictions building permits start at like 50,000 and in some cases after utility tieing fees and other fees can cost well over a 100,000 just to get a paper entitlement to build without even considering the cost of the land and the cost to build the property green energy requirements and ever increasing Energy Efficiency requirements and even requiring Sprinklers and new properties have all driven the costs of building a property up to the point where is not possible to build an affordable house some of the relaxed building requirements compared to building a normal home for adus are a good example of how these policies have forced the market to try to address the shortages and it isn't that I'm not for more energy efficient or safer housing but there's just a point of diminishing returns that we have long long since P I believe rent control has more to do with the increase in rents than any other single cause California rent control which was implemented on January 1st 2020 as the result of the of California Assembly Bill 1482 this created a limit on how much rents could go up this caused two things to happen the first it created an expectation of rents going up up every year secondly it forced many landlords who would not have otherwise raise their rents to raise their rents each year because previously landlords who had kept their rents low could still sell their properties and the new landlord could bring rents up to a fair market value this can no longer happen under the current rank control law now with Proposition 33 Key Details this as a background let's look at what proposition 33 would do I've put a link of the analysis by the Legislative analysis office which is a nonpartisan group in the description down below rental housing is expensive in California renters in California typically pay about 50% more for housing than renters in other states and in some parts of the state rent costs and more than double the national average we know this is a problem rent is high in California because the state doesn't have enough housing for everybody who wants to live here people want to live or have to compete against other renters for housing which increases the costs but it also is increased because the state has made it so hard to build affordably I don't believe proposition 33 is the solution there is a state law known as the cost of Hawkins r rental Housing Act this law limits local rent control laws in three main ways the first rent control cannot apply to any single family homes second rent control cannot apply to any housing built on or after February 1st 1995 third rent controls generally cannot tell landlords what they can charge a new renter when first moving in instead rent control can only land how much landlords increase rents for existing renters under proposition 33 this law would be repealed single family homes would be rent controlled this has the effect of landlords selling these properties to owner occupants which forces rents up further new multif family properties which are currently exempt from rent control would be rent control that sounds good until you hear that in a large city in the midwest that recently did this that building permits fell by 75% which made the housing shortage so bad it had to be repealed vacancy control is the most dangerous of all of them since once a property is behind the fair market value in rents even if it is vacated the rent cannot be raised by amount more than the normal rent control restrictions this makes renovating older property is nearly impossible when they go vacant for people who don't have Deep Pockets the indirect result of these policies can be seen in many rent controlled cities in the Bay Area where prices are being forced down tax bases are falling and that leads to less public service resources Rising crime and Urban Decay it is for all of these reasons I believe a a no on proposition 33 is needed if you agree please share this video with other like-minded people How to Reach Me whether you're thinking of buying or selling investment property in the next s days or S months feel free to give me a call text me or let's schedule a zoom meeting so we can discuss how I can help you have a smooth investment purchase or sale