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Will Big Real Estate Spend $100 Million to Kill California’s Prop 21?

DECISION 2020--Over the last several months, the real estate industry has shelled out nearly $84 million in campaign cash to kill California’s Proposition 21.

The big question now is: will corporate landlords such as Essex Property Trust, Equity Residential, and Blackstone Group spend $100 million to try to stop the statewide initiative? 

Prop 21 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. It’s why U.S. Senator Bernie Sanders, labor and civil rights icon Dolores Huerta, Congresswoman Maxine Waters, the California Democratic Party, the Los Angeles Times, and California’s housing justice movement have thrown their full support behind Prop 21.

The need for stable, affordable housing has taken on added urgency because of the COVID-19 pandemic — people must have shelter to stay safe and healthy.

But corporate landlords such as Blackstone Group, Essex Property Trust, and Equity Residential are banding together to oppose Prop 21, shelling out tens of millions in campaign contributions. These real estate companies are desperate to maintain a rigged and broken housing market that allows them to charge wildly inflated rents, making billions off the backs of California renters.

In the 2010s, according to Zillow, U.S. renters paid a staggering $4.5 trillion to landlords.

“On Dec. 1,” Zillow reported last year, “the nation’s renters didn’t just make their last rent payment of the year – their landlords also collected their last rent payment of what was a very lucrative decade. All-in-all, U.S. renters paid roughly $4.5 trillion in rent during the 2010s, capped off with $512 billion in 2019 alone.”

California landlords were especially raking in gigantic profits.

Zillow found that in 2019, Los Angeles renters paid $39.2 BILLION to landlords. San Francisco renters shelled out $16.4 billion. San Diego renters forked over $10.3 billion.  Riverside renters wrote checks totaling $7.4 billion. San Jose renters paid $6.5 billion. Sacramento renters delivered $4.8 billion to landlords. Massive amounts paid by seniors living on fixed incomes, working-class families, recent college students, and teachers and nurses.

No matter. Blackstone Group (led by CEO and billionaire Stephen Schwarzman), billionaire landlord Geoffrey Palmer, and multi-millionaire Michael Hayde have contributed millions to the California Business Roundtable Issues PAC that has funneled $6.1 million to No on Prop 21: Californians to Protect Affordable Housing. 

Essex Property Trust (led by CEO Mike Schall), Equity Residential (led by billionaire and co-founder Sam Zell, pictured above), and a host of other corporate landlords are directing their millions to No on Prop 21: Californians for Responsible Housing sponsored by the California Apartment Association

The real estate industry has formed four No on Prop 21 committees, with Californians for Responsible Housing leading them all in fundraising, according to state filings. In only the past two weeks, the California Apartment Association-sponsored committee has grabbed an eye-popping $32.5 million in campaign cash to stop Prop 21. In total, Californians for Responsible Housing has raised a shocking $73,860,072.

With the other No on Prop 21 committees, Californians to Protect Affordable Housing has collected $9,245,691; Issues PAC of Apartment Association of Greater Los Angeles – No on 21 has raised $600,735; and Californians for Affordable Housing sponsored by the California Rental Housing Association has raked in $192,951. 

That’s a grand total of $83,911,495.

If Californians for Responsible Housing sponsored by the California Apartment Association keeps up its recent fundraising pace, the No on Prop 21 campaign will collect an astounding $100 million by Election Day.

Tellingly, 15 corporate landlords have delivered 72 percent of all contributions to Californians for Responsible Housing, shelling out $53,791,244. Essex Property Trust, one of the largest apartment owners in the nation, is the leading contributor. 

Top Contributors to Californians for Responsible Housing sponsored by the California Apartment Association: ($1 million or more)

  1. Essex Property Trust: $15,013,300
  2. Equity Residential: $11,052,800
  3. AvalonBay Communities: $8,779,500
  4. Prometheus Real Estate Group: $3,134,600
  5. UDR: $2,525,042
  6. Apartment Investment and Management Company: $2,036,900
  7. Sequoia Equities: $1,821,260
  8. George M. Marcus and Affiliated Entities: $1,713,000
  9. Invitation Homes: $1,231,290
  10. General Investment and Development (GID): $1,146,000
  11. R&V Management Corporation: $1,100,000
  12. Camden Development: $1,082,000
  13. Jackson Square Properties: $1,061,600
  14. Californians for Responsible Housing – General Purpose Committee: $1,012,219
  15. Richard Tod Spieker, including Spieker Companies: $1,009,733

Essex Property Trust, Equity Residential, AvalonBay Communities, UDR, Apartment Investment and Management Company, Invitation Homes, and Camden Development are publicly traded real estate investment trusts.

Equally telling is the hundreds of civic leaders, social justice groups, housing justice organizations, and labor unions who support Prop 21, including the Los Angeles and San Francisco tenant unions, SEIU California, California Nurses Association, California Alliance for Retired Americans, former United Nations special rapporteur on the Right to Housing Leilani Farha, and Black Lives Matter – LA. 

In the fight over Prop 21, the line of battle is clear: Wall Street landlords versus longtime fighters for justice and fairness. California voters will have to decide who they want to stand with. For many, the choice is a no-brainer: YES on Proposition 21.

(Patrick Range McDonald is the award-winning advocacy journalist for Housing Is A Human R. He is an occasional contributor to CityWatch.)

-cw