11:29am

Thu March 13, 2014
Economy/Labor/Biz

In San Francisco, rent control gets personal

 

Rent control has been a way for cities to regulate their housing prices and evictions since World War One, in the wake of a big housing shortage in New York. But that doesn’t mean it’s common. In fact, only a handful of cities in the United States have rent control, like New York City, Los Angeles, a few cities in the Bay Area and San Francisco.

San Francisco’s rent control got its start in the seventies. It was a reaction to sky-high inflation, house-flipping, and massive rent increases. In an interview for the 1978 documentary “Pushed Out for Profit,” tenants’ legal advisor Nikki Tufano explained the current situation.

“There’s no limitation on how much your rent can be increased. I had a group of people come in here who were living across town who had seven rent increases in the past year and a half,” she said.

Tenants banded together, and in June 1979, the Board of Supervisors passed the Rent Stabilization Ordinance, or rent control.

Lately, there’s been a lot of talk about rent control in San Francisco, seeing as how the city now has the nation’s highest rents. But what exactly does rent control actually mean?

Let’s start with the most basic foundation of rent control. Which tenants qualify for it?

“Right, good question. Because that's always one of the bigger questions here is what's rent controlled and what's not.”

That’s Robert Collins, the deputy director of the San Francisco Rent Board, which enforces the rent control laws in the city. Collins continues:

“Rent control generally affects properties that were built prior to the passage or the effect of the rent ordinance, so buildings that were built before June 13, 1979 generally are rent-controlled.”

Key word here? Generally. You have to be in an apartment--not a condominium. An apartment is rented out by the landlord of a whole building, while condos are each owned by a different landlord and rented separately.

Now if you do live in a condo, or a single-family home, you most likely don’t qualify for rent control--unless it was built before 1979 and you moved in before 1996.

So now we know who qualifies for rent control. But what is it, exactly?

“Rent control in San Francisco basically comprises of two parts,” Collins explains. The first part deals with “eviction controls.”

“There are eviction protections so a landlord needs to have a just cause to evict a tenant.”

There are fifteen “just causes,” to be exact. Like Ellis Act evictions. Or if you don’t pay rent on time, or you become a nuisance to other tenants, or someone in your landlord’s immediate family wants to move into your unit. In those cases then the landlord can evict you. But if the landlord sells a building under rent control while you’re living in it, legally you’re safe.       

“The other side, the big side, is price controls,” Collins says. “A landlord in San Francisco can raise the rent by the allowable increase every year.”

That’s tied to the Consumer Price Index for the Bay Area--which is a measure of inflation. The rent increase is sixty percent of that index number. Collins says that this year, it's one percent.

“The Consumer Price Index was about 1.6 percent and 60% of that is one percent,” he explains.

This is a major difference from rent control policies in other cities. In New York and Los Angeles, the cities’ rent boards have more discretion with yearly increases: they can hike up rents way higher than whatever the inflation rate happens to be. In New York, that’s meant higher increases under the business-friendly mayors Rudy Giuliani and Michael Bloomberg.

But New York also has something called vacancy control. This is a pretty big deal. Vacancy control puts a cap on how much a landlord can increase an apartment’s rent between tenants. It’s supposed to protect new tenants in real estate booms.

San Francisco doesn’t have this. Instead, landlords can raise the rent as high as they want when a new tenant moves in.

In 1979, San Francisco was dealing with a housing crisis. The city responded by passing the Rent Control Ordinance, but this was designed to do only thing: to protect tenants from getting priced out of the places they already lived in. It had nothing to do with keeping overall rents down. In these San Francisco terms, then, rent control is a success. Whether the policy is the best one--for new renters, old renters, or landlords--that's another question.

Related Program