OPINION San Francisco could see an end to rent control — and minimum-wage requirements and a lot of zoning regulation and environmental protection laws and much more — if Proposition 90 passes this November. We could see an end to limits on condo conversions and an end to requirements that developers build affordable housing units and even an end to limits on the height and density of new developments. That's because Prop. 90 is a clever trap that purports to restrict the use of eminent domain but in reality eliminates all government regulation of land use.
Prop. 90 really says little about eminent domain; it just uses the notion of restricting the ability of government to seize private land as the bait. Most of the initiative is aimed at ending all government regulation of property. Its concept is simple: if any government regulation reduces the actual or potential value of property — even by a dollar — then the government would have to reimburse the property owner the difference.
For example, if a landlord would be able to get $3,000 a month on the open market for an apartment but rent control limits what a long-term tenant has to pay to $1,500, then the landlord would be able under Prop. 90 to sue San Francisco for the difference. Think about that: about 200,000 rental units in the city are under rent control. Say the average difference between the market rent and the rent-controlled amount is $500 per month. That would mean landlords could collectively sue San Francisco for $200 million each month, or $2.4 billion each year. Since San Francisco obviously can’t afford to put half its annual budget into compensating landlords, there would be no choice but to repeal rent control.
Landlords would also be able to sue for the difference between what their buildings are worth as rental properties and what they are worth as condominiums. Any property owner denied the ability to convert to condominiums could then sue for that difference in value. Since a property subdivided into condos is worth about 50 percent more, this bill would be huge.
The list of disasters goes on and on. If a developer is required to make 15 percent of the units in a housing project affordable, then the developer could sue to make San Francisco pay for the lost income. If zoning laws limit heights in a neighborhood to three stories but a developer wants to build a 10-story condo tower, the developer could sue the city for the lost value of those seven stories of condos.
And it's not just land-use and tenant protection. The city and the state both have minimum-wage laws; potentially, every business owner could sue to demand compensation for the loss of income that came from mandating higher wages than the market might have allowed. That would be the end of minimum-wage laws. Environmental protection and mitigation could face the same fate.
Prop. 90 is by far the worst measure on this year's ballot; in fact, it's the worst measure to come along in quite some time. It's a plot by right-wingers to gut the ability of government at any level to force businesses and property owners to accept even basic standards of behavior in the name of the public good. The measure hasn't gotten a whole lot of media attention, but defeating it should be a top priority for every decent Californian. SFBG
Ted Gullicksen is director of the San Francisco Tenants Union.