SF and Daly City: Rent Control Soon to be Uncontrolled?
I am a renter, and thus depend on rent contol to keep my $1968 per month one bedroom plus office affordable. Still, I do see the issue from the property owner’s view, especially when a tenant has been sitting on a unit for decades, maybe paying $600 for something that’s now renting at 4 times that elsewhere. Both sides on the issue have a point: rent contol protects tenants; it also unfairly burdens owners with unprofitable rentals and drives new rental prices up as compensation.
Prop 98 then, you’d think, would be getting a lot of political play in this city, since it aims to abolish rent control along with eminent domain. Curiously, the issue has had very little press. I’m not alone in noticing this: Socketsite posted a commenter’s blog recently saying very much the same thing:
i’m a little mystified that prop 98 is not getting more play in SF. prop 98 is the state-wide initiative on the june 3 [ballot] that limits eminent domain, and importantly for SF, phases out rent control.
given the huge significance of this, i am amazed that the realtor community is not heavily pushing this. but more peculiar, i am only seeing limited involvement from SF apartment advocates, and the larger apartment holders in the city (i.e. citiapartments, etc.) it’s clear that prop 98 will not pass within SF proper, but that does not matter as it’s the massive outlying suburbia that will have the voting power to push it through. still, i’d think that cities like SF would want to make a lot of noise about it, so the rest of the state can see how significant it is.
The writer goes on to speculate reasons for the relative silence, including Realtor communities not wanting to publicly antagonize SF’s progressive groups and supervisors and the possiblity that landlords actually enjoy some benefits from rent control (read the whole comment at Socketsite). The writer also reminds us that SF is not entirely against eminent domain, since this is the legal loophole that allowed the city to seize Hotel Hugo.
Some people might wonder why eminent domain and rent control are packaged together in Prop 98, since you could easily be for one and against the other. For you, Prop 99 is the better bet.
Other things to know:
*Prop 98 would not effect current renters, but will affect all properties coming vacant after the Prop passes (if it passes).
*Prop 98 could interfere with community and environmental laws within cities, such as environmental protection restrictions on building, or inclusionart programs which force developers to include a percentage of low income/BMR housing.
*Prop 99 “is a careful and narrow restriction of the use of eminent domain. It focuses only on homes taken and transferred to private uses, and allows for appropriate exemptions to protect public health and safety, and for other legitimate purposes. These exemptions do not exist in Prop. 98. (Source: SPUR Voter Guide)
*Prop 99, also according to SPUR, “has the potential to limit smart growth development. In particular, it would make it more difficult to develop transit villages or to restructure single-use subdivisions into mixed-use communities….and to dampen the ability to finance new public transit by making it more difficult to create transit villages near stations.”
Incidently, SPUR comes down as a no-vote for each Proposition.
In any case, Bay Area and particularly SF voters need to get fully informed and perhaps a bit more vocal about these two June issues on our ballot. They will certainly impact us, though just how is perhaps up to the voter’s perspective. As long at that perspective is educated, I can’t complain.
No on 98 text (advocates 99 instead)
Image credit: Laila Lalami
Greg said:
“I am a renter, and thus depend on rent contol to keep my $1968 per month one bedroom plus office affordable.”
What makes you think that if you didn’t have rent control you wouldn’t be able to afford it? Maybe you’re looking at current market rates, but those rates are higher than they would normally be *because* of rent control
“Both sides on the issue have a point: rent contol protects tenants”
It only protects renters who get in early at lower prices, everyone else comes in at artificially higher prices. And that means you have people who could well afford to rent a more expensive place paying lower rents (because rent control doesn’t discrimminate) whereas people who cannot afford as much are priced out of the market or cannot afford to move. Not much protection as I see it.
I rent and am *against* rent control because it is an artificial attempt to control resources prices in the short term but hurts everyone in the long term - renters and landlords alike.
May 22, 2008 4:57 PM
sw said:
Vote Yes on 98, No on 99.
98 reduces eminent domain and abolishes rent control. If 99 also passes, 98 will be overridden and rent control will stay in effect.
When a good is forced to be sold at a rate lower than fair market value, hoarding occurs. This leads to shortages and high prices on similar items that aren’t under price controls. That is why it is so hard to get an apartment in the City and when you can, the rent is sky high.
I’m a renter and I’m voting yes on 98.
May 22, 2008 9:18 PM
david g said:
Good post, Anna. I started a post on this last week but didn’t finish it so you beat me to it!
I also believe rent control should be abolished. It reduces the overall stock of quality rentals over time, and it also disincentivizes owners to maintain their buildings in a high-quality manner.
May 22, 2008 10:56 PM
James said:
BS! 98 will over-ride a city’s right to do what it wants with its own property- in SF, that means no more provisos to developers so they HAVE to include BMR units in new developments. You think anyone will do that if they aren’t forced to? Look who backs this prop! DEVELOPERS!
May 23, 2008 12:25 AM
sw said:
James, I’m not sure what makes you think that a city owns the property within it. That is just ridiculous. Individual people own the property and the government has limited power to control how the property is used. Prop 98 shifts the balance of power more towards the property owner, as it should be. The side effects of this will benefit everyone.
May 23, 2008 7:32 AM
MG said:
Some other context from out of country (India).
The courts and government in India is very protective of renters. As a result, it is very difficult to get renters out of yourt apartment and/or increase rents, even without rent control. In some cases, landlords will pay hundreds of thousands of rupees (IUSD=43 Rupees) for a tenent to get out.
As a result - a lot of people who have the money and would like to participate in the increasing real estate market have purchased apartments as investments and keep it empty. There are a lot of housing - but still people do not find affordable rental housing
May 23, 2008 9:19 AM
BB_Smurf said:
As the Socketsite post indicated, rent control should probably go, but I think emininent domain is a good thing for our society and shoudl remain.
The government should be able to take abondoned or blighted property from negligent owners and resell it to someone else who will do something useful and uplifting. Keep in mind that the former owners will be compensated.
Furthermore, I think that prop 98 will be challenged in Federal court because it is pre-empted by federal law which permits the invocation of emininent domain for private development when the development is for “public benefit.” It is settled case law, that replacing a run down neighborhood with new commercial and/or residential development can be considered for the “public benefit” (Sorry, don’t have citation off-hand). The rationale was that these developments generate tax revenue, look nicer, and tend to have less crime.
I wonder if the city had to exercise a little emininent domain when it decided to redevelop China Basin?
Now, I am not a fan of Irvine-like cities, but would you rather have a situation like Detroit?
May 23, 2008 10:03 AM
David said:
What if the “former owners” don’t want to be compensated? What if the compensation is below market? Why don’t I take your house, tear it down and put up a bigger one–that will generate more tax revenues, after all…
There’s a word for that. It’s called “theft.”
Rent control has been shown time and again to do three things:
1) Reduce supply of housing, driving up prices
2) Decrease quality of housing, essentially driving up prices (you’re paying more for a ****hole)
3) Cause middle-class flight (rich can afford anything, political pressure forces BMR units in housing developments for “poor” people; middle-class can’t afford it anymore and move).
May 23, 2008 11:08 AM
James said:
SW: I think that because I read the text and the SPUR analysis, as well as who is backing the bill and who isn’t. Furthermore, as BB_smurf points out, this is another or those lame duck props that won’t survive in court, because of federal law’s ultimate “eminent” power over any state legislation. 99 is just as bad as it is basically trying to fix something that isn’t even broken.
The rent control thing got thrown in to attract and distract- bait and switch.
May 23, 2008 11:09 AM
BB-Smurf said:
David: First, I wasn’t advocating rent control–merely pointing out that this iniative is flawed and giving a legal history of why.
Second, I think you have a fundamental mis-understanding of the Emininent Domain doctrine. Local and state government generally do not invoke this doctrine for private use, unless the particular parcel is necessary for a massively larger project, like the China Basin redevelopment. I have several good friends who are government attorneys, and most of the emininent domain stuff they do are easements, or small strips of a larger parcel (think acres). So the scenario you are speaking of is extremely unlikely. I think the city would have a hard time justify how tearing one house & replacing it with a single larger one would benefit the public as a whole.
The more likely scenario, is where entire neighborhoods are abandoned and left unoccupied. With the uptick in forclosures, there are areas that ahve fallen into this scenario such as Detroit (and parts of the East Bay) that have fallen to squatters, drug dealers and other unsavory elements. While the vast majority of the absent homeowners would welcome the quick sale, individual hold outs happen for various reasons. In such a case, the government would invoke emininent domain because they don’t want one holdout to prevent the redevelopment of an entire neighborhood. Yes, they do work with the homeowner to help them relocate and etc. They only resort to legal force when necessary.
Furthermore, as James agrees, this proposal is doomed due to federal pre-emption. Rent control was definitely a last minute add-on to make the entire proposal more attractive to voters.
I can see that you’re passionate about rent control. Perhaps you should get something on the November ballot that will abolish rent control? Judging from poll numbers, props 98 & 99 will fail.
May 23, 2008 12:20 PM
david g said:
Because the city is 2/3 renters, it will not pass I am sure. But that’s because 95% of said renters unfortunately don’t understand how it all works and how it could be.
May 23, 2008 4:02 PM
James said:
Yes- BB Smurf nails it. And I think Anna’s blog did the same since she is pointing out the hidden legal snafus soon to follow if it does pass and that rent control and eminent domain ARE NOT the same thing and don’t belong on the same initiative at all.
Read the text and you will have to agree. Too many people vote based on “oh, rent control; I’m against that so I must be for Prop 98.” That’s like saying that the existence of one beautiful woman means therefore that all women will be beautiful- the logic doesn’t carry through if you take it all the way.
May 23, 2008 4:05 PM
anna said:
when i said i was “protected” by rent control, i meant that though my apartment might be more than it should be (it is) and that might be because of rent control (maybe. other issues play in too though), at least i know that when the lease is up, it can’t shoot up to 3000 or whatever. because of rent control i can settle in to the home, can do a budget and stick to it, can unpack and fell like i actually live there, not wondering if i will have to leave come year’s end.
with rents as they are now (again, partially driven up by rent control, but not that alone), if i did not have this protection, i’d be very nervous indeed. i know that prop 98 does not affect people living in rentals now, but i was trying to make fair point about the fact that as a renter now in the city, i enjoy the benefits of rent control.
now, i do see rent control’s part in the prices being so high in the first place. that’s why i said: both sides of the issue have a strong stance. i think the best opinions are those that take opposing views into consideration– those are the educated opinions. those are the type i try to cultivate.
May 24, 2008 11:23 AM
anna said:
sorry about the typos. i have been swimming too much and my eyes are blurred by chlorine. yay, vacation! hope i still made my point clearly enough.
May 24, 2008 11:26 AM
margaret said:
As a landlord, I know I have benefited from rent control. With rent control suppressing supply and demand, I am able to rent my 3 bedrooms for $4,200/mo.
May 24, 2008 5:05 PM
David said:
Smurf–
I understand it perfectly, and I also understand that my scenario is unlikely. However, as in Kelo, people have had their houses taken to give to Pfizer and a hotel developer. That’s unfair, and little different than my extreme scenario.
Detroit has turned into a shell due to failed urban policy and massive employment displacements. It sure could happen here, but as our employment base is more diversified, I find your extreme case probably as likely as mine. Although if the gov’t continues to increase the costs of doing business here, we could turn into Detroit. (never mind unreliable, 3rd world power grids, etc).
As for voting, it’s my policy to vote “no” on every proposition, begun when the ultimate in stupid propositions–the banning of horsemeat for human consumption–passed. The whole proposition process is flawed, and I thought the reason we elected legislators was to, well, legislate. We pay state reps $117K/year, plus $170/day when the legislature’s in session (half the year) plus cars, etc. Maybe they should try doing something once in awhile.
So, you might be surprised to learn I’ll be voting ‘no’ anyway, as a matter of principle, and there will be no proposition from me. Even though it’s close to trumping my limited gov’t philosophy, I dislike this and all other propositions more.
May 25, 2008 7:17 AM
anna said:
Interesting comment, Margaret- it’s not the first thought I’d had, that landlords would actually want to keep rent control, but you are surely showing the benefit.
From reading everyone’s comments (and thanks for them), I have a feeling this prop is doomed.
May 25, 2008 10:22 AM
Maggie said:
I am really tired of everyone pretending that the abolition of rent control will solve the problems we as renters face. In fact, if landlords had no controls, we’d be more screwed than we already are. Greed can’t be allowed to run unchecked.
May 25, 2008 3:17 PM
Henry said:
Another empty and duplicitous prop– agree with DAvid– these ballots are a jok and this measure the funniest of all
May 27, 2008 3:36 PM
scott said:
I also think this prop is convoluted- why include eminent domain with rent control? And can we ever really regulate eminent domain? If the Fed wants land, it’ll take it. If the State wants land, it’ll find a way. Owners get reparations- just like now. Why do we need this proposition?
May 27, 2008 7:09 PM
Deborah said:
We should consider why rent control was instated in the first place. If all it does is drive up rent, why did it pass in the beginning? Because, like Manhattan, we can’t rely on landlords to set reasonable prices and KEEP them from lease expiration to lease expiration. Yet the city relies on its vast majority of renting residents to STAY PUT.
Enter rent control.
NO ON 98!
May 28, 2008 2:13 PM