States of Emergency
As the country was voting in a new Democrat majority in Congress, states, by and large, were surprisingly resistant to the progressive trend.
Going into the election, Republicans controlled both houses of the legislature in 32 states. By the end of the evening, Republicans would only cede one state to Democrat control. Democrats did, however, grow its control of legislatures to 18 by flipping New Hampshire and three other states that were previously under shared control with Republicans.
The most astounding development of the evening was California voters’ overwhelming rejection of a statewide rent control initiative. Known as Proposition 10, it would have allowed municipalities to adopt draconian versions of rent control. The initiative was soundly defeated by more than 60 percent of the vote – a margin of defeat that is consistent with previous efforts to pass rent control in such places as Santa Rosa, Calif., and Portland, Maine.
Despite this success, the threat of rent control across the country persists. Consider that five of the 31 states controlled by Republicans and four of the 18 states controlled by Democrats do not have state statutes prohibiting municipalities from adopting a rent control scheme. The existence of state preemption alone does not guarantee protection for the industry.
Currently, Illinois, Colorado, Oregon and Washington are lining up as the next locations for the battle against rent control. Adding to this are the unknown consequences of the gubernatorial party change from Republican to Democrat in Illinois, as well as Michigan and Wisconsin. Overall, of the 36 governors’ seats on the ballot, Democrats realized a net gain of seven seats for a total of 16 governorships, with Republicans tentatively holding on to 20, while Florida heads to a recount.
The sound rejection of rent control expansion in California and its well documented historical failure does not seem to disqualify it from public policy consideration. The apartment industry must remain vigilant by taking advantage of opportunities to educate elected officials on the unintended consequences of this disastrous policy – but equally important, to support the industry in the places where rent control will be tested.