Why California Is Shrinking and Sinking, and How To Reverse It

A for rent sign in front of an apartment building

California’s population has shrunk for three consecutive years while 42 other states have grown.

A shrinking population is a sign of economic distress. Nevertheless, California is home to 178 billionaires – the most of any state by far. At the same time, California has the highest level of poverty, with 5 million Californians living in poverty – more than the entire population of 25 states.

There are essentially two Californias. How can it be that we are the richest and the poorest at the same time?

It is because California has the highest cost of living in the country, driven by sky-high housing prices. Every poll shows that people are leaving the state because the rent is too damn high. Nine in 10 Californians believe that the state’s dream of home ownership is beyond most people’s reach, and the situation for renters is even worse. About 3.2 million tenants are now “rent-burdened,” which means that they are spending more than 30% of their income on rent alone.

Extreme income inequality generally leads to economic decline. California can’t shrink its way to greatness. If we continue to shrink, then our economy and our standard of living will continue to fall for the majority of people. Such a gargantuan problem demands a different, bolder approach. Allowing our people to be at the total mercy of landlords has gotten us to the place we are today. If rent remains uncontrolled, the result will be the same – people fleeing the state for a place where they can afford to live.

Homeowners may feel immune to rental costs. However, as the shrinking continues, the sinking follows. As the population shrinks, the needs of the remaining population increase while the tax base decreases. California is staring down the barrel of a $73 billion budget deficit. This is a prescription for disaster. If we continue down this path, the quality of life will deteriorate for both renters and homeowners.

Rent control seems like a radical idea to many. But, in reality, America has had rent control in different places for more than 100 years. It is actually a rather conservative idea. Regulating rents is the equivalent of setting utility rates. We recognize that everyone needs electricity and water, and we put into place a safety net so everyone can manage.

Why not the same for the most basic needs of shelter? The only thing that is standing in the way of sensible rent control is the billionaire corporate landlord class, which has killed every effort to moderate rents.

This November, California has a golden opportunity to strike a blow against billionaire corporate landlords and extreme income inequality, and in favor of Yes on 33. The 2024 ballot initiative would allow localities to cap rental increases, lowering the cost of living across the state and reversing the housing affordability and homelessness crises that are ravaging our communities.

Whether you are a renter or a homeowner, we must turn the tide of California’s deterioration. We are shrinking and sinking, but that doesn’t need to be a death sentence. It is not inevitable if we act now. Vote “yes” for rent control.

Michael Weinstein is the president of the AIDS Healthcare Foundation (AHF), the largest global HIV/AIDS organization, and AHF’s Healthy Housing Foundation.