Housing Now CA on Gov. Newsom’s ‘Hypocritical’ Alignment with Big Real Estate

Karen Ocamb News

The federal Calvary has not ridden to the rescue with a COVID relief bill as Gov. Gavin Newsom had hoped when he signed AB 3088 just before midnight on Aug. 31. The “bridge” bill was designed to delay an expected tsunami of evictions for unpaid rent as a result of job losses due to the COVID-19 pandemic. The bill expires at the end of January 2021. But Newsom claims it’s not only good enough to prevent an explosion in the homelessness crisis, he’s the featured Democrat enabling the No on Prop 21 campaign to claim it has bipartisan support in opposing Prop 21, the Rental Affordability Act.

Prop 21 is the statewide ballot measure that puts limits on unfair, sky-high rent increases, reins in corporate landlord greed, and prevents homelessness. Top experts at USC, UCLA, and UC Berkeley agree that sensible rent limits are key for stabilizing California’s housing affordability crisis. That’s why Reps. Maxine Waters, Karen Bass and Barbara Lee, the California Democratic Party, the ACLU, the California Nurses Association, the California Alliance for Retired Americans, Black Lives Matter, the Los Angeles Times, and a slew of LGBTQ organizations and individuals — including LA County Supervisor Sheila Kuehl, LA City Councilmember Mike Bonin and LA Unified School Board member Jackie Goldberg — have thrown their full support behind Prop 21.

“We need a real, federal commitment of significant new funding to assist struggling tenants and homeowners in California and across the nation,” Newsom said upon signing AB 3088. Presumably, Newsom expects House Speaker Nancy Pelosi to secure a massive federal aid package after the presidential election. But regardless of the election outcome, Donald Trump will still be in power until January 20, 2021 – eleven days before rent moratoriums are lifted and back rent, with interest and penalties are due in California. And Trump will be untethered from any niceties required by a reelection effort, he disdains California, as former Department of Homeland Security Chief of Staff Miles Taylor noted on Oct. 27, alleging that the president told FEMA in 2018 to withhold wildfire aid because Californians “don’t do anything for me.” Eventually Trump relented, but only after Newsom appeared at times to be embarrassingly obsequious.  

Could Newsom’s active collaboration with major Trump corporate donors backing the No on Prop 21 campaign be a flare to the Trump administration to please send money? Francisco Duenas, director of Housing Now! California, a statewide housing justice advocacy coalition, thinks it’s more about Newsom.

“Gov. Newsom has shamefully chosen to align himself with corporate real estate interests to the detriment of everyday Californians, especially communities of color most impacted by the twin crises of coronavirus and exorbitant housing costs,” Duenas says. “But it fits a recent pattern. Gov. Newsom also vetoed stronger labor safety protections for domestic workers and job retrieval protections for hospitality workers. Unfortunately, year in and year out, these corporate interests and their billionaire CEOs give lots of money not only to ballot initiatives but to political campaigns so that elected officials know who is calling the shots.”

Those shots will be heard around the world if Prop 21 does not pass and an eviction tsunami occurs in California, especially in L.A., which is already ground zero for the homelessness crisis.  

AB 3088 “definitely is not a long term solution to what Californians are facing regarding housing precariousness, housing challenges and COVID,” says Duenas, noting that his affordable housing coalition was pushing for a different bill, AB 1436. The bill Newsom signed was “the watered-down version.” The governor’s office set up negotiations and AB 3088 was “the best that they could get.” However, “they engaged very late in the process. We were pushing for the governor to be part of these conversations a lot earlier.”

“I think everybody was waiting to see if the federal government was going to give states more money. I think that’s the dynamic that you are still seeing — trying to wait for the federal government to help out. And while that’s definitely needed, we were saying that we should come up with a Plan B that works for us,” Duenas says.

“When asked by reporters about the effort to prevent mass evictions, Newsom would say, ‘Oh, we are in conversations with these landlords and corporate landlords, and mom and pop landlords and everybody,'” Duenas recalls. “But they wouldn’t say that they were in conversations with groups representing community members or tenants. Now you see Gov. Newsom coming out against Prop 21. We just worry that he’s very aligned with corporate real estate and that’s showing up again in this proposition fight.”

Recently, Housing Now! California launched a new website, www.CaliforniaNotForSale.org “to expose the toxic impact of Big Real Estate’s ongoing campaign to buy out our communities and rig California policy and elections.”

Three top California real estate industry associations — the California Association of Realtors, the California Apartment Association, and the California Business Roundtable, populated by powerful donors and allies with ties to Trump — have funneled tens of million of dollars through nearly three dozen political action and independent expenditure committees from January 1, 2020 to September 19, 2020 “to keep voters from breaking their stranglehold on California politics and politicians,” according to the Housing Now coalition.

 “When we were passing last year’s big tenants bill, everybody knew that it was a baby step. It was a big babysit, but it’s a baby step because it’s not rent control,” Duenas says. During the proceedings, “Assemblymembers all referred to it as anti-rent gouging. Basically, it’s basic consumer protection for tenants — because they didn’t have any before. A landlord could raise the rent as much as they wanted to on millions of tenants and that’s completely legal.”  

And it will remain legal, unless Prop 21 is passed.

“If you are renting a single-family home or if you are renting an apartment that was built after 1978 in Los Angeles, those are built-in loopholes that the state has because of Costa Hawkins,” says Duenas. “And what we were trying to do was to say, ‘Okay, well, we won’t do rent control — but let’s just do basic consumer protections: not let landlords gauge the tenants. And so that’s why there is a rent cap. But it’s so high — it’s 5% plus CPI, which is the Consumer Price Index. CPI goes up and down so it’s around 8% a year. That’s very different than rent control, which is tied to more of a Cost of Living, which is usually just around 3%.”

Duenas predicts that Newsom will try to please both sides. When he’s supporting AB 3088 “he’ll say, ‘This is not rent control. It’s anti-rent gauging and that’s why I’m willing to sign,’ it because he knows his corporate real estate friends would not appreciate him supporting rent control. And now that he’s fighting this expansion of rent control, he can say, ‘Oh, that was really rent control.’ So, it’s hypocritical to label it differently based the situation.”

Considering Newsom’s long espoused beliefs and actions to combat homelessness, including dedicating the entire State of the State address to the issue, the governor’s regular appearances in lie-laced ads from the billionaires-backed No on Prop 21 campaign hits way deeper than simply calling the once adored progressive a “hypocrite.” It feels like a betrayal.