Hundreds of apartments are under construction in midtown Sacramento. Opponents of rent control say it discourages building of new housing. Tony Bizjak The Sacramento Bee
Hundreds of apartments are under construction in midtown Sacramento. Opponents of rent control say it discourages building of new housing. Tony Bizjak The Sacramento Bee

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Capitol Alert

Where rent control battles are emerging in California

By Angela Hart

ahart@sacbee.com

August 02, 2017 11:26 AM

UPDATED August 03, 2017 08:17 AM

As housing costs soar across California, rent control fights are erupting in cities seen as ground zero for the state’s affordability crisis.

In 2016, voters in the Bay Area cities of Richmond and Mountain View enacted rent control, coupled with companion measures that make it harder for landlords to evict people. Tenant advocates hailed their success at the ballot box as a demonstration of “renter power” building throughout the state.

The wins dealt a significant blow to the California Apartment Association, which has pumped millions of dollars into anti-rent control campaigns. It worked in Alameda, Burlingame and most recently, Santa Rosa, where opponents pumped nearly a million dollars into the campaign committee against rent control.

Defeating rent control, as proposals pop up in cities small and large, is seen as crucial by groups representing landlords. In their view, every successful campaign fuels growing statewide momentum for stronger renter’s protections.

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They argue that rent control discourages new construction and diminishes the quality of housing because landlords would have less money to make repairs.

“We are taking all of this very seriously,” said Tom Bannon, chief executive officer of the Apartment Association.

Tenants and housing activists say rent control helps stabilize neighborhoods, preserves their diversity and retains affordable housing in communities where prices are rapidly increasing.

California’s rent control movement, strongest in the late 1970s and early 1980s, is again gaining steam as the state faces an extreme housing shortage that has led to skyrocketing rents and rampant tenant displacement. State officials call it an unprecedented crisis, exacerbated by the erosion of state and federal funding for low-income housing development.

Activists are launching new rent control campaigns up and down the state, from Sacramento to Pacifica to Glendale.

They are also pushing state lawmakers to repeal a 1995 law that limits the type of housing covered under rent control.

“We’re in the middle of a housing crisis, and again and again the state has failed to act, when it should be taking action on the displacement of renters and addressing the funding gap created by the gutting of redevelopment agencies,” said Aimee Inglis, associate director of the advocacy group Tenants Together.

“Once again, we’re faced with this narrative that’s really just a version of trickle-down economics, that you can just build a ton of market-rate housing and somehow that’s going to solve this crisis,” she said. “The Legislature needs to be challenged on what kind of state this is going to be – is this just a playground for the rich?”

So what is rent control and what does it do?

▪ Rent control laws freeze the amount a landlord can charge per unit the date local ordinances are adopted. After that, rents can be raised minimally each year. If a tenant moves, the rent can then be raised to market rate, re-adjusting the baseline for rent control when a new tenant moves in.

▪ Some cities that were early adopters of rent control, like San Francisco and Santa Monica, actually have fewer units covered under local laws than cities that later adopted it. That’s because a state law called Costa-Hawkins said rent control can only be applied to housing from the date a local ordinance is adopted and prior. For example, San Francisco’s law covers only units constructed in 1979 and earlier.

▪ The Costa-Hawkins law, enacted in 1995, limits the ability of local government to enact stronger rent control laws. It says only units built before 1995 can be covered in new ordinances, and rent control will never apply to a large supply of housing stock, including single-family homes and duplexes.

Activists want to remove the 1995 limit and allow cities and counties to enact stronger rent control laws.

Since rent control only applies to older units, why would it have a “chilling effect on new construction,” as Bannon put it?

“The moment you start talking about rent control, it creates this pause, and that affects where people are willing to invest their capital,” he said. “Rent control has never built a new unit. My other big concern is you lose focus, and that should be on increasing supply. If California wants to continue to be a vibrant state and attract new jobs, we need to focus on building.”

Cities that currently have rent control:

Beverly Hills: passed in 1978

Los Angeles: passed in 1979

San Francisco: passed in 1979

Santa Monica: passed in 1979

San Jose: passed in 1979

Hayward: passed in 1979

Palm Springs: passed in 1979

Berkeley: passed in 1980

Oakland: passed in 1980

Thousand Oaks: passed in 1980

Los Gatos: passed in 1980

East Palo Alto: passed in 1983

West Hollywood: passed in 1985

Richmond: passed in 2016

Mountain View: passed in 2016

Angela Hart: 916-326-5528, @ahartreports