California’s rent control ballot measure could reverberate across the US: Proposition 33 would allow cities to limit rent increases. Some economists doubt that’s a good idea.

If passed, the measure would give authority back to local governments to enact or change laws on rent control. For advocates, passing Proposition 33 would be a critical opportunity to address California’s housing crisis head-on. For the real estate industry, defeating Proposition 33 would mean maintaining the status quo in a market that has made billions for corporate landlords.

While rent control — caps on rent increases — provides relief to tenants, some economists suggest there are significant trade-offs: Rent control policies can lead to higher rents for uncontrolled units, reduce landlords’ incentive to maintain units, and dampen the creation of new rental housing — exacerbating affordable housing shortages.

Since January 2021, states and localities across the country have implemented more than 300 new tenant protections, according to the National Low Income Housing Coalition, a nonprofit that pushes for housing affordability.

And some housing advocates think that if Californians approve the ballot question, other states could follow suit, expanding rent control in the coming years as a way to prevent large rate hikes that can force out low- and middle-income tenants.