Rising rents, a growing renter population, and heartrending stories about evictions and displacement meant this should have been a good year to ask Californians to loosen restrictions on rent control.

But the measure allowing greater protections for renters, Proposition 10, failed miserably at the polls.

What now?

Advocates havent given up. They see a political ally in Gov.-elect Gavin Newsom and strength from an expanding coalition of groups supporting tenant rights.

Pressure on tenants remains intense in California, where more than half of California renters are “cost burdened,” meaning they pay more than 30 percent of their income on rent, according to the UC Berkeleys Haas Institute for a Fair and Inclusive Society .

In Southern California, rents are expected to climb into 2020, ranging from 1.7 to 2.3 percent from Los Angeles to Orange and Inland Empire counties.

“Just because Prop 10 lost doesnt mean the problems tenants face disappear,” said Assemblyman David Chiu, D-San Francisco. “We have to do something.”

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Tenant advocates say the movement still has momentum, despite the clear rebuke from voters. Landlord and real estate investor groups say theres room to negotiate — but further rent control measures may be off the table.

The next step could be to reform — not repeal — the state rent control law known as Costa-Hawkins, which was targeted by Prop 10. The law limits a citys power to place rent control on new construction. A repeal would have given cities the choice to impose strict regulations on rent increases on apartments, condos and rented single family homes.

Housing advocates are optimistic Newsom will bring renewed attention to the states shortage. Newsom opposed Prop 10, but supported more renter protections.

Newsom said “]in a post-election news conference that housing is a top priority — building more units for low and middle-income residents, preserving affordable neighborhoods and preventing displacement. “Youre going to hear a lot more from me on housing and transportation because I see the two as the same,” he said.

Both sides are hopeful Newsom will foster a more robust housing policy. He set a goal of creating 3.5 million units of housing by 2025 — a pace six times faster than home construction during the last decade.

Chiu, who co-sponsored an unsuccessful bill to repeal Costa-Hawkins this year, is also optimistic about housing reform in Sacramento. Options could include new protections from evictions, and smaller modifications to state rent control laws. Lawmakers are already discussing bills, he said.

“Were looking at a wide range of ideas,” Chiu said.

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Property owners are now confident voters do not want government price controls to guide the relationship between landlords and tenants.

Debra Carlton, senior vice president for public affairs for the California Apartment Association, said the vote was a “resounding no” on expanded rent control. The association, which represents the largest commercial investors in residential real estate, could find common ground with tenant groups on pro-development measures, she said.

Reform of local development policies could encourage more construction of apartments, homes and condos, offering renters more choices. “You cant let cities off the hook,” Carlton said.

Sid Lakireddy, a Berkeley landlord and incoming president of the California Rental Housing Association, said the vote should not stall efforts to compromise. He believes the message from voters on Prop 10 was that rent control would not solve the housing shortage.

“Weve been under-producing housing since the 1980s,” Lakireddy said. “Theres no silver bullet. Theres no magic solution.”

Lonnie Vidaurri, director of investments at StarPoint Properties in Los Angeles, said the state could encourage more multi-family developments through tax breaks and other incentives for new construction in poor communities. State policymakers understand the need for more development, he said, because “the housing shortage in California is so intense and acute.”

Supporters of the repeal effort expected a difficult campaign. Well-funded opposition from landlord and real estate investors outspent the Yes campaign by 3 to 1 in the run-up to the election, according to public filings.

“Its a disappointing outcome, but I dont think anyone should read into it for the future of tenants rights,” said Jeffrey Buchanan of Working Partnerships USA, based in San Jose.

“Prop 10 was a very uphill fight from the start,” said Randy Shaw, tenant rights activist in San Francisco and author of “Generation Priced Out.”

Shaw said the organizing efforts — bringing tenant groups together from grassroots to a statewide campaign — will help on future local and statewide battles. He added that it would also force lawmakers in some districts to “feel like they have to do something.”

Housing advocates say the lessons learned can be used to push tenant issues, such as making evictions harder, protecting older and disabled renters — into local and state discussions. Local cities still have the authority to enact rent control.

Damien Goodmon, a tenant rights activist in Los Angeles and former director of the Yes on 10 campaign, said the ballot initiative brought more attention and energy to renter issues than any event in at least 30 years.

Renter groups gained size and experience from the campaign, Goodmon said. “Theyve put on notice the elected leaders in both parties,” he said. “Every member of the housing justice community feels theres a lot to build on. This was truly a spark.”

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