Making the Case for Rent Control
It’s time to set the record straight about rent control and its proven role as a solution to stabilize local housing markets and avoid mass displacement. Unless you think landlords should be able to raise rents however much they want, whenever they want, you believe in rent control.
Modern rent control does not permanently freeze rents. Rent stabilization establishes reasonable annual increases. Rent Control means that landlords cannot raise rents more than a small, reasonable percentage each year, based on a percentage of Consumer Price Index/inflation. Rent control and just cause for eviction protections work best together. Just cause for eviction means landlords would have to give a reason for evicting tenants, and would have to pay relocation costs for reasons where the tenant is not at fault.
Without these protections, landlords are free to raise rents in any amount and evict good tenants for no reason at all. Just cause for eviction and rent control ordinances have a proven track record in 19 California cities, including Los Angeles, Oakland, San Francisco and East Palo Alto, to protect countless low income tenants from displacement.
As Richard Arnott writes in “Time for Revisionism on Rent Control,” rent stabilization like we have in California prevents rent-gouging and displacement and allows for a fair return on investments. The only law that imposed rent ceilings existed in New York City before 1970, which has since been overhauled. Misinformation about modern rent control stems from economists views on rent ceilings.
Tenants seek nothing more than to reside in our homes without fear of displacement. 46% of the residents in California are tenants. We raise our families here, send our kids to school, pay our taxes, vote, and contribute to our community.
However, we are often ignored in policy discussions about housing. Landlords and realtors have dominated the discussion for years with scare tactics and false information about rent control protections. Meanwhile, they are profiting from unlimited rent hikes and displacement. Landlords try to scare the public about rent control with bogus talking points. They regularly argue that rent control will inhibit new development, but cities with rent control in California have some of the most new developments in the state. They argue that rent control is costly, but fail to note that rent control is ultimately cost neutral for cities because the programs are funded through a per unit fee on landlords. They argue that “just cause for eviction laws” stop the eviction of tenants who violate their obligations, despite the fact that every rent control law allows eviction for nonpayment of rent or tenant misconduct. Put simply, the landlord propaganda against rent control has no merit.
Rent control doesn’t make rents rise, that’s like blaming a fire on the presence of a firefighter. Rents rise for many reasons — rent control is not one of them. Eric Fischer’s recent analysis of San Francisco rents from 1950 to present day found that rent control did not increase rent overall, and did not distort the rental market. In Boston, a study showed that when rent control was eliminated in Cambridge, costs of all housing — formerly rent controlled and uncontrolled units — rose dramatically.
It makes sense that expensive cities are the ones that pass rent control — these regulations get considered, passed and retained in response to high prices. When modern rent control laws were first passed in California, they were passed in response to landlords raising prices in response to inflation in 1970s and not lowering them even after the state passed a law giving tax relief to property owners through Prop 13.
Modern rent control does not impact new housing. In 2011, a study of Winnipeg rent controls found that more housing was built after rent control was enacted. Accordingly, the boom and bust cycles of local housing construction are driven by the overall health of the economy, not rent control.
Rent control does not affect quality & quantity of housing. A study by urban planner John Gilderbloom showed that modern rent control laws in 100 U.S. cities have not negatively impacted the quality and quantity of rental units and actually motivated landlords to increase maintenance of rental housing. By law, landlords must comply with code requirements for rental housing and the extent of enforcement is the primary determinant of the quality of the housing stock.
Rent control is good for local economies. Rent control helps renters keep more disposable cash in their pockets to support local economies. Rent control is not about putting landlords out of business. It’s about fairness, and allowing landlords a reasonable return while giving tenants the peace of mind that they can budget for reasonable yearly rent increases.
Rent control can be adopted with little or no cost to cities. In fact, communities with rent control fund administrative costs through a small per unit fee paid by landlords.
The landlord and real-estate lobby say the real solution is to build more housing, but trickle-down housing policies don’t work. Co Star, a real estate research firm, reported that of 370,000 multi-family rental units completed from 2012 to 2014 in 54 metropolitan areas, 82% were considered “luxury.” Luxury housing is the new “market-rate.” Building housing for high-income people attracts more high income people, rather than lowering prices to levels affordable to low and moderate income people. In a gentrifying market, demand typically far outpaces what can realistically be built. High-income renters don’t just go for newer units, they demand older units too, and are able to outbid lower-income tenants. Many cities without rent control are seeing higher rents on older units and new units are unaffordable.
The “supply problem” message has successfully allowed some of the leading drivers of our housing crisis to evade blame: the rise of Wall Street’s new rental empire. In recent years, foreclosed homes have been snapped up in bulk by real estate speculators and corporate landlords who turn them into rentals. The biggest owners of single-family home rentals in California are no longer mom-and-pop landlords, but mega Wall Street corporations like Blackstone and Colony Starwood.
Rent control doesn’t “work” like it should because it is undermined by state laws like the Ellis Act and Costa Hawkins Act. Our hands are tied by the state to implement strong rent control. Landlords have pushed to deregulate rent control so it is less effective, then they point to how rent control should be banned because it “doesn’t work.” Like the deregulation of other social welfare programs, they work to limit and undermine broad support for progressive policy.
Through Ellis Act evictions, thousands of rent-controlled units have been taken off the market and converted to condos. The Costa-Hawkins Rental Housing Act prevents rent control from protecting condos, single-family homes, rentals built after 1995, and allows landlords to charge market rate for new tenants (called vacancy decontrol).
The Harvard Law Review singled out vacancy decontrol as a reason for landlords to harass current rent-controlled tenants in order to make more money on new tenancies. In 2000, the journal of the American Planning Association cited vacancy control as essential to preventing displacement. Through Costa Hawkins, vacancy control is banned in California.
Housing is not just any consumer good; it is necessity of life, and rents should be regulated for the public good. It should be treated like any other public good like food, water, and air. The choice about rent control is clear: help corporate landlords push people to the streets with unfettered rent increases, or help communities protect the greatest cultural and economic asset cities have: their people. Rent control is an essential policy to prevent the displacement of community members who live here now while we seek long-term solutions to reign in the cost of land and housing.
Our #RentControlToolkit 2.0 is here! Learn how to stand up to landlords and organize for rent control and housing justice in your community. Click here to download our new toolkit, Communities Thrive with Rent Control.
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