In Downtown Los Angeles, an inadvertent experiment has proven a lot of points about the causes and solution to the housing crisis. While the vacancy rate across the whole city of Los Angeles is a stubborn 4 percent, the vacancy rate in downtown has become a much more competitive 12 percent.

What happens at 12 percent vacancy? Apartment owners and building managers start to compete for tenants, offering perks like free parking or free rent for the first few weeks. Apartments are nicer, the buildings are newer or updated, and the downtown is experiencing a cultural revival with new bars, restaurants and retail.

Rents downtown are still very high. But it’s encouraging that landlords are competing for tenants. That suggests that maybe something resembling a healthy housing market is starting to emerge. It certainly stands in stark comparison to the crisis that is strangling the rest of Southern California.

There’s a pretty simple reason why the market is better downtown. For the last few years, thousands of new apartments have been built. Building in California is almost impossible because of the high costs of environmental review and the roadblocks that neighborhood opposition groups throw up at every step of the planning process.

But downtown Los Angeles is an example of what can happen when those factors are reduced: as infill development, the environmental process is a little easier, and residents aren’t as opposed to, well, pretty much everything.

One thing the downtown does not have is an exemption from the Costa-Hawkins Rental Housing Act, which limits cities and counties from placing onerous rent control measures on new residential units.

And yet a group of citizens has decided that repealing the Costa-Hawkins Act and allowing cities to place rent control on new developments is the logical step to solve California’s housing crisis. They’ve filed a proposed ballot initiative with the California Secretary of State, which is the first step to placing the repeal on voters’ ballots.

I understand the appeal of rent control. Who hasn’t been mad when the rents go up and you have to start looking for a new place?

But the people behind the initiative – including the AIDS Healthcare Foundation, which just can’t resist spending donors’ dollars on poorly-thought-out ballot measures with no relation to AIDS or health care – have fundamentally misunderstood the reasons for California’s housing crisis.

We simply do not have enough housing in places that people want to live. And we don’t have enough housing because supply is not keeping up with demand – developers are looking at the high cost of building, and the price they can sell or rent their properties, and deciding that it just doesn’t pencil out. Putting a thumb on the scale by keeping rents artificially low makes projects even less likely to pencil out, worsening the crisis.

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