The Approaching Battle for Rent Control

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Over 100 tenants attending a recent community forum for renter's rights organized by Housing 4 Sacramento.

By C.R. Mills

Sacramento faces skyrocketing rents as an onslaught of new and higher-income residents move into the city. As landlords raise their tenants’ rent, long-term residents with deep ties to their community grow increasingly at risk of being forced out of the City or onto its streets. Local residents and activists have begun to look towards rent control as a powerful tool to help address this crisis. They face a tough battle.

Well-organized and heavily funded, the opposition to rent control initiatives in California has a track record of campaigning hard and often successfully against such efforts. In particular, the California Apartment Association, representing landlords throughout the state, unleashes a heavy stream of cash to kill rent control proposals whenever they’re made. Last year in Santa Rosa alone, in a city less than half the size of Sacramento, the Association dumped almost a million dollars in a committee to defeat a rent control initiative there.

Locally, Mayor Darrell Steinberg already expressed reservations about establishing rent control in Sacramento. And when activists began floating the idea last year, op-eds quickly appeared in the Sacramento Bee arguing against it. It’s doubtless that if rent control does make it before City Council or before voters as a local ballot measure, it will endure sustained and powerful push back. Therefore, thoughtfully addressing the primary arguments against rent control as early as possible represents a vital step towards ensuring rent control can in fact become a reality.

Argument 1: Rent Control Doesn’t Work

Joe Mathews, in his Bee op-ed, puts this argument bluntly: “Rent control is a policy that, as libraries full of research demonstrate, doesn’t accomplish its avowed purpose to make more affordable housing available.”

Yet a variety of  academic studies show that rent control does in fact increase housing stability for low-income residents. The Urban Displacement Project, a joint research effort on housing displacement between UC Berkeley, UCLA, and Portland State University, found an association between areas with rent control policies and lower levels of displacement. Researchers at Columbia and New York University studying displacement in New York, as well as a University of Washington study on gentrification, revealed similar findings.

Equally important are the stories of real people actually benefitting from rent control, such as San Francisco residents Alison Mortiz and her family.

Moritz manages a program providing care to seniors with serious disabilities, primarily Alzheimer’s, for a San Francisco-based non-profit. Her partner, Tim Cohen, plays in a well-regarded rock band, works in a restaurant, and shows his art locally. They have two young children, the older of which recently started Transitional kindergarten at a nearby school.

 

“No way would we be able to live here without rent control,” said Moritz, who pays about $1,800 for a rent-controlled upper floor apartment tucked into a Victorian near Alamo Square. “My co-worker has two kids, spends $3,500 for a two-bedroom apartment here, and her husband works weekends to pay for it. We just couldn’t do it.”

Cohen moved into the unit 15 years ago, and since then, the city only allowed their landlord to raise rent by 2 to 3 percent per year. San Francisco’s rent control laws have thus enabled Moritz and Cohen to stay in the city they want to be in. From time to time, they’ve discussed the fear of being forced out of their home if rent control disappeared. “We’d probably have to relocate to someplace like Colorado,” said Moritz. “We’d have to leave our city, the schools we fought so hard to get into - but it just wouldn’t be an option to stay.”

In both research and in the stories of individuals, then, rent control can work to ensure low and middle income residents reside in the cities they call home.

Argument 2: Rent Control Ends Development and Ruins Landlords

In comments to the Sacramento Bee about rent control, Mayor Steinberg stated his belief that the lack of affordable housing in the city can mostly be attributed to “not building enough housing...We need to change that and be very aggressive about it.” While the theory that simply building more housing will necessarily solve the housing crisis - essentially a trickle-down economics theory - can certainly be debated, it’s unclear what this argument has to do with rent control, which puts no limits on the development of new housing. In fact, current state law prevents rent control from applying to any unit built post-1995, so newly constructed units would not be subject to the law.

In a surprising move for someone so well-versed in public policy, Steinberg nevertheless connects the two issues, stating he remains concerned about “unintended consequences” associated with rent control that could suppress new construction.  

Even though rent control would not apply to new development, and therefore would do nothing to prevent it, it’s important to examine the “unintended consequences” Steinberg vaguely refers to. His unstated argument centers on the idea that rent control reduces profits for landlords, thereby preventing them from wanting to enter the rental market by purchasing new units.

Yet research contradicts this claim. According to a City of Berkeley study on rent control there, for example, landlords take in “$100 million annually in rent over and above the increases needed to provide owners with a fair return on their investment.” In addition, the value of the City’s apartments doubled between 1999 and 2013, from $1.2 to $1.5 billion. According to City of Los Angeles study, 79 percent of rent-controlled units there were purchased after rent control went into effect, revealing a strong incentive to invest in rent-controlled apartments despite landlord claims to the contrary.

Rent control might put a dent in landlords’ profits. But it certainly wouldn’t put them out of business - nothing of the sort has occurred in other cities where rent control has been enacted. Not only can landlords continue to raise rents a reasonable amount each year, they can also pass on the cost of necessary building improvements to their tenants. In addition, non-payment of rent or violation of a lease would still result in eviction of a tenant, even under rent control.

Argument 3: Rent Control Equals More Complicated, Expensive Bureaucracy

Cities often use a simple, straight-forward approach to implementing rent control. Every year, landlords would be notified by the City of the maximum amount they would be able to raise rents, the justifiable reasons they could evict a tenant, and improvements to the unit for which they could pass the cost of onto their tenant.

If tenants felt they received an unfair rent increase or were being evicted for an unjust cause, they would bring their dispute before a Rent Board. Appointed in some cities, elected in others, these boards hear both sides of the case and make a determination for either side.  

The administration of the Rent Board and rent control program can be funded by a small per-unit fee often shared by landlords and tenants. For most cities, rent control programs can be cost neutral.

Argument 4: Why Can’t People Unable to Afford Rents Just Live Somewhere Else?

Some have simply shrugged and asked why people unable to afford to live in a city shouldn’t simply move out of it. While the other arguments addressed in this article center on debatable policy decisions, this argument speaks to our basic values.

To a large extent, cities choose who gets to live within their borders. By enacting rent control, Sacramento would make a statement: that it values economic and cultural diversity amongst its citizens. San Francisco made a similar statement years ago, and as a result, families like Moritz’s - which cares for seniors with disabilities, contributes to the local art scene, cooks food for residents, and sends children to neighborhood schools - can reside there.

Without using tools like rent control to ensure people like the Moritz family can remain in our cities, we allow economic segregation of the places we live, turning cities into monocultures of the rich. The people that teach our children, care for our family members, and give back to the community we live in connect our lives to each other. By forcing them from our cities, we suffer.

Having witnessed the life-changing impacts of rent control herself, the choice for Moritz is an easy one. “I would say that rent control is imperative to keep the people who work in the city living in the city,” she says. “It keeps the city livable, and it’s essential to keep families here. In the city, you need people like me who are here taking care of of other people. You need us here to support everyone else.”


 To get involved in the fight for rent control, join Sacramento DSA's housing committee. To learn more about the statewide effort for rent control, check out the Rent Control Toolkit produced by Tenants Together.