AFSCME’s push for rent control proves the importance of the Janus union-dues ruling

By Steven Greenhut
August 1, 2018

Sacramento

What do the following two things have in common: The U.S. Supreme Court’s recent decision allowing government workers to opt out of paying union dues and an effort by liberal activists to pass a rent-control initiative in November? On the surface, both issues directly involve the American Federation of State, County and Municipal Employees. AFSCME was the defendant in the court’s Janus v. AFSCME case and its affiliate supports the California campaign.

More significantly, such promotion of a political initiative that has nothing to do with worker rights illustrates the wisdom of the high court’s Janus ruling. The court declared that all mandatory dues – even for collective-bargaining activities – are a violation of the First Amendment’s right to free association. Government workers may now opt out of all union payments, which means that public-sector unions will have less time and cash to promote these kinds of nefarious left-wing ballot campaigns. It’s the very definition of the “win-win” cliché.

The Janus decision changed the status quo that went back to 1977, when the Supreme Court split the free-speech baby in the Abood decision. Back then, government employees had to pay union dues – and the unions were free to use the money however they preferred, on everything from contract negotiations to political action. It clearly was wrong to force conservatives to fund liberal political activities (and vice versa) or to belong to a group they found offensive.

But the court was concerned about “free riders” when unions negotiated contracts on behalf of their members, so an uneasy truce was reached for four decades. Public employees would pay their dues to their respective bargaining units, but they could go through a convoluted process to opt out of union membership and keep the portion of dues (determined by the unions) that went directly to political activism. Plaintiff Mark Janus argued, however, that all union spending is inherently political. If, say, a union protects workers from firing or passes a massive pay increase, then those have a direct bearing on public policy and publicly funded budgets.

Fast forward to the current rent-control campaign. In 1995, the Legislature passed the Costa-Hawkins Act, which halted localities from placing rent controls on single-family homes and condominiums and newer properties. It also outlawed vacancy controls – rent-control statutes that forbid property owners from raising rent prices to market rates after a tenant vacates the unit and before it is rented to someone new. In the face of a housing shortages and soaring rents, activists have qualified a measure for the November ballot that would repeal Costa-Hawkins. It won’t impose rent control on the state, but will let localities pass far-reaching rent-control measures.

Rent-control is a disastrous policy, of course. There’s no question that California already is not building enough housing, with the Legislative Analyst’s Office noting in 2015 that the state needs “to build as many as 100,000 additional units annually – almost exclusively in its coastal communities – to seriously mitigate its problems with housing affordability.” It’s impossible to measure the degree to which rent controls add to that problem, given that they stop new housing from ever happening. It’s hard to measure what never took place. But such controls always restrict the creation of new supply. And they divert attention from the real cause of skyrocketing housing prices: the state’s growth controls and the California Environmental Quality Act, which encourages litigation against building projects. Instead of capping prices, policy makers need to encourage apartment construction.

Rent control appears to be, as Swedish economist Assar Lindbeck said, “the most efficient technique presently known to destroy a city – except for bombing.” We can see that in San Francisco, which has such strict tenant-protection laws that 30,000 or more apartment units sit vacant in a city where average rents push $4,000 a month. Why would landlords forfeit such revenue? Because the city’s laws make it nearly impossible to evict a tenant, so many property owners don’t want to rent their apartments to strangers, given they may never be able to get rid of them.

That’s just the most astounding example of how rent control and other laws that purport to protect tenants but which, in fact, make it harder for the majority of them, destroy cities. They incentivize owners to turn their rental housing into condos or vacation rentals. They discourage renovations. Why upgrade the kitchen and roof when you don’t want to lure new tenants, but wish the old ones would go away? They dissuade developers from building apartment complexes. Because landlords are stuck with tenants who pay under-market rents, it encourages investors to get out of – rather than into – the housing business. No wonder there’s a housing shortage, given that rent controls punish people for providing a much-needed product.

One can find union fingerprints on virtually every bad idea in California, so it’s no surprise that public-sector unions are backing this campaign. “AFSCME California PEOPLE, the political and legislative body representing over 90,000 of the AFSCME’s 179,000 members in the state, has endorsed Proposition 10, the Affordable Housing Act, a statewide initiative to repeal the Costa-Hawkins Rental Housing Act and return the right of local communities to set reasonable limits on rents through rent control,” according to a recent press release.

If one doesn’t agree with this kind of political effort, one shouldn’t be forced to support it. Indeed, this type of campaign is directly politically, and union members have long been able to opt out of spending for such things. In particular, contributions to “AFSCME People” are voluntary, although the union has set a goal of gaining contributions from 10 percent of its members.

Still, the simple fact is clear: The more members any union has, the greater its ability to muscle contributions from members or to simply use current dues – or exact temporary assessments – to fund a coming political effort. The more money it has overall, the better able it is to focus on broad-based political campaigns rather than focus on services for, and retention of, its members. The new post-Janus reality means that workers who don’t want to be in the union can more easily opt out of it, which will over time reduce the power of the unions.

Here’s what AFSCME wrote about the case (before the ruling) on is website: “If the billionaires and corporate CEOs behind this case get their way, they will take away the freedom of working people to come together and build power to fight for the things our families and communities need: everything from affordable health care and retirement security to quicker medical emergency response times.” Translation: Janus will reduce the ability of unions to lobby legislatures and pass voter initiatives that promote destructive policies such as rent control.

Obviously, it’s too late for the decision to reduce AFSCME’s power in time for the November election, but think of all the noxious, future initiatives that won’t see the light of day as government unions are forced to focus on self-preservation rather than left-wing politics. This is a real-world example of why Janus was such a significant decision.

Steven Greenhut is contributing editor for the California Policy Center. He is Western region director for the R Street Institute. Write to him at sgreenhut@rstreet.org.

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