Rent Control's Mixed Effects in San Francisco

As California debates the future of rent control in its municipalities, a group of Stanford economists have conducted research that connects San Francisco's existing policy with higher housing costs.

1 minute read

November 14, 2017, 1:00 PM PST

By Philip Rojc @PhilipRojc


Tenderloin District

K M / Flickr

In San Francisco, writes Katy Murphy, existing rent control policy "has saved tenants in those units thousands of dollars per year. But it brought on a crippling side effect, according to a provocative new Stanford paper: Many landlords stopped renting out those coveted apartments."

"Since the policy took effect in 1995, the number of renters living in such units dropped by a staggering 30 percent as the rentals were rebuilt or converted to condominiums or single-family homes [...]" By converting to non-rental units, property owners could legally evade the requirement to control rents. 

Tenants of rent-controlled units have clearly benefited, but has the city as a whole? "The same policy caused rents citywide to rise 7 percent, costing San Francisco renters $5 billion. A better way 'to provide social insurance against rent increases,' [the authors] suggest, could be to offer tax credits or government subsidies to renters."

Meanwhile in Sacramento, activists are seeking the repeal of 1995's controversial Costa-Hawkins Act, which limited the scope of local rent control throughout California.

Also see Reuben Duarte's analysis of Costa-Hawkins and California rent control policy.

Thursday, November 2, 2017 in The Mercury News

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