Fissures widen in SF over state rent control initiative
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Trade unions oppose statewide ballot initiative that would unleash local rent control, calling it anti-housing at a time when California needs to build more. Traditional political allies at odds in the fair suburb to the north. Adam Brinklow at the excellent Frisc website explores.
On June 18, the SF Supervisor board’s bid to bless a rent control proposition slated for November’s ballot suddenly imploded.
Judging by the San Francisco vote for previous state measures to expand renter protection, the issue is narrowly popular in the city. Like those previous measures, the upcoming Justice For Renters Act aims to repeal a 30-year-old California law that stifles local rent control.
At that hearing, Sup. Catherine Stefani, who represents the Marina, Pacific Heights, and other northern neighborhoods, called the prospective measure “a Trojan horse” backed by “a coalition of the most regressive Republicans in the state” and other “conservative ideologues.” (A GOP city councilmember in Orange County has lauded the act. Stefani did not respond to questions about other Republicans who might also be supporting it.)
Echoing the opposition of two top state lawmakers and trade unions, Stefani predicted that the act would “freeze the creation of critically needed homes” across the state. Sup. Matt Dorsey, whose district includes South of Market, echoed Stefani’s comments and said he would not endorse the measure.
Sup. Dean Preston, the resolution’s sponsor, fired back that Stefani’s comments were reminiscent of scare tactics from landlord lobbies, which consistently oppose rent control. Sup. Hillary Ronen called criticism of the act “distortions” and recalled her own experience growing up in a rent-controlled Los Angeles home.
Meanwhile, Peskin, who is running for mayor, held up a print-out of the act and said he could find nothing in it to provoke such dire predictions.
Indeed, the entire measure is just one sentence long. How could interpretations be so wildly divergent?
The Justice for Renters Act is the product of the Los Angeles-based AIDS Healthcare Foundation, a nonprofit that operates health clinics and sells prescription drugs in more than 40 countries.
Founded in 1987 and still run by 71-year-old cofounder Michael Weinstein, AHF has grown its revenues to $2.5 billion a year, thanks to its pharmacy sales, according to the Los Angeles Times.
About $100 million of that money has also poured into several ballot initiatives, according to the Times, including two previous bids to repeal the Costa-Hawkins Rental Housing Act, the 1995 law that limits rent control throughout California.
AHF funded repeal efforts in 2018 and 2020, both times losing handily, with only about 40 percent of state voters in favor. These are the measures that San Francisco voters went for, and it’s somewhat odd the rest of the state didn’t.
When pollsters ask, Californians express broad support for rent control as a concept. “Rent control is super popular, except in the hands of Michael Weinstein,” says UC Davis land use professor Chris Elmendorf. “It’s a complete mystery that rent control polls well” but voters never pass it.
“Rent control” refers to a variety of municipal laws that limit how much landlords can raise rents. California cities began passing statutes in the 1970s in response to soaring inflation, rents, and home values. In San Francisco, the 1979 Residential Rent Stabilization and Arbitration Ordinance added protection to apartments built before that year. (The permissible rent hike for those buildings is less than 2 percent this year.)
Under the state’s Costa-Hawkins law (named for Fresno Democrat Jim Costa and LA county Republican Phil Hawkins), apartments that were subject to rent control in 1995 could remain so, but cities could not mandate rent control for new buildings.
Despite Costa-Hawkins, rent control got a modest statewide boost in 2019, when then-state Assemblymember David Chiu, now SF’s city attorney, successfully authored a rent cap for homes more than 15 years old. It is not as aggressive as rent control in cities like SF.
Today, roughly 70 percent of SF renters still live in rent-stabilized units, according to the city’s Housing Element, thanks to a housing stock that’s some of the oldest west of the Mississippi. According to data from the SF Rent Board, some residents under rent control pay as little as $250 a month. Meanwhile, market-rate rental platforms like SF-based ApartmentList report that newer homes can rent for thousands of dollars monthly.
New rent-controlled homes in SF are rare. Developers must agree to create them, presumably as part of a deal with the city. The lack of new rent-controlled stock stokes fears that the aging supply is dwindling. (Amid the board’s June 18 arguments, Sup. Myrna Melgar said SF’s protected apartments are “falling into decay.”)
“Costa-Hawkins has frozen San Francisco rent control to the point that 45-year-old buildings are exempted as ‘new construction,’” says Shanti Singh, spokesperson for the renters advocacy Tenants Together.
There are protections. For example, a state law says a development that demolishes a rent-controlled home must include at least as many rent-controlled units in the new building, and renters displaced by the construction get first dibs on those new apartments. Those displaced are also entitled to relocation costs.
San Francisco has had low eviction rates compared with other major cities. And since 2019, residents facing eviction have been entitled to free legal help.
The paradox is that in San Francisco, with its limited housing options and high cost of living, research shows rent control is a critical anti-displacement tool. Yet some evidence also shows, as we’ll see, that it might suppress the construction of new apartments, which SF desperately needs.
Critics warn that those 23 words will give anti-development cities and towns a way to stave off new housing that California regulators are demanding.
Under recent state rules, Bay Area cities must make room for more than 440,000 new units this decade via blueprints known as Housing Elements. San Francisco’s element calls for more than 82,000 new homes, and more than half must be below market rate. Some cities have been more compliant than others.
Dubler, who says he supports rent control expansion generally, warns about the vagueness of Justice for Renters: “Because this ballot measure has that [may] not limit’ in it, it will enable rent control laws so bad [that] no one will build.”
The state may not limit the right of any city, county, or city and county to maintain, enact or expand residential rent control.
Sup. Preston, who ran the advocacy Tenants Together for years, dismisses the criticism and tells The Frisc via email that “repealing Costa-Hawkins, and ensuring that those protections can last, has been a priority for tenant advocates for decades. The Justice for Renters Act does that.”
As Stefani noted on June 18, the measure has attracted some Republican support. A GOP lawmaker in Huntington Beach, south of Los Angeles, highlighted its appeal to locals who chafe at the state’s demands for new housing. “It gives local governments ironclad protections from the state’s housing policy,” said city councilmember Tony Strickland at a March meeting.
Many progressive Democrats across the state are also bristling at the state’s demands. Peskin voted for SF’s Housing Element in early 2023 but immediately denounced it, and he has spent his mayoral campaign playing to fears of new housing, especially on the west side, while promising a “Marshall Plan” for affordable homes for middle-income residents.
Read the whole thing here.
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