Come November, residents of San Mateo and Burlingame will have their say on rent control. In San Mateo, community activists were able to obtain well over the 11,000 signatures required to place their proposed rent control measure on the ballot, and in Burlingame city officials put forward their own measure. Should either pass, it could set a precedent for the rest of San Mateo County.
The pro-rent control movement gained a lot of momentum over the past year and a half, fueled by several widely circulated “evict, renovate, and increase rent” stories. The case that probably garnered the most media attention, and helped catapult the rent control debate into the public discourse, was that of the 18-unit apartment complex at 910 Clinton Street in Redwood City. The complex was sold, and the new owners promptly served all tenants a 60-day notice to vacate so they could proceed with renovations. However, instead of vacate, many tenants chose to stay and rally in front of the building for more time – a demonstration that quickly took the form of a protest for rent control. One of the tenants, a 14-year old high school student, became the spokesperson for the evicted tenants, and his pleas for rent control were run on virtually every major public news outlet – NBC Bay Area, Kron 4, ABC 7. Ultimately, the issue was resolved when the owners agreed to assist the evicted tenants with relocation costs. 910 Clinton Street, now called “Velocity at Clinton”, currently offers 1 bed, 1 bath apartments at roughly $2,500/month.
Since the evictions at 910 Clinton, rent control proponents in Redwood City have done everything in their power to make their voices heard by lawmakers – from organizing roughly 200 people outside of City Hall, to marching down El Camino. The issue was eventually taken up in City Hall, but rather than put forth a rent control initiative, city officials agreed to pass a per square foot impact fee on new development that will go towards building more affordable housing. However, if either measures pass in Burlingame or San Mateo, tenant advocacy groups in Redwood City could take up rent control again with a renewed sense of confidence.
I won’t get too deep into my own views on rent control, but everyone should hear the case against it – especially since that side is rarely covered in the media. Rent control essentially creates a subsidy paid for by a small group of private citizens (rental property owners). These people are paying the subsidy through the money they are losing by not being able to rent their property at market value. Let’s look at it this way: if affordable housing is a viewed as a right that should be afforded to ALL citizens, is it fair to levy the burden on providing that right on a minority group within the population? And if it’s fair to set a price ceiling to protect renters, is it then also fair to set a price floor to protect property owners in the event the rental market bottoms out?
Another factor to take into consideration is that rent control could actually serve to decrease the supply of rental units. Short term, rent control could constrict the rental supply by scaring some landlords out of the business. This has actually already begun in Burlingame, where the owner of a 10-unit apartment building recently served his tenants notice to vacate, citing that he did not want to run the risk of having to operate his building under a rent control ordinance. In the long run, it could slow the construction of new rental units, as many developers would likely shy away from building in a city with a rent control ordinance. Let’s remember, it’s a shortage of available rental units fueling the affordability crisis in the first place. Anything that would further tighten supply could exacerbate the issue.
No one would argue that families being displaced by rising rents isn’t an issue. The question is: is rent control the practical solution to the affordable housing crisis, or the emotional one?
If you own rental property in Mateo County, take note. If a rent control ordinance is established in San Mateo or Burlingame, it could become the standard bearer for similar ballot initiatives elsewhere in the county. Read below for a brief synopsis of each
Burlingame – Measure R
Measure R would accomplish three things: repeal Measure T, which currently prohibits the City of Burlingame from regulating real estate sale/rental prices; establish a rent control ordinance; enact just cause for eviction provisions.
The rent control ordinance would apply to all multifamily residential buildings with initial certificates of occupancy before February 1, 1995. It excludes single-family homes, condominiums, owner-occupied duplexes or secondary dwelling units, hotels, motels, hospitals, certain nonprofits, dormitories and certain governmental facilities. The ordinance would establish a base rent for each tenancy based off the amount paid on March 30,2016. Under this ordinance, rent increases would be limited to once per year, and will be restricted to an amount proportional to the rate of inflation (but no more than 4%). Tenants would be able to petition for lower rents if their landlords provide substandard housing, decrease housing services, or increase rent above what is allowed under the ordinance. Conversely, landlords would be able to petition for rent increases under some circumstances to ensure a fair rate of returns.
The just cause eviction provision would apply to all units under rent control as well as single family homes, condominiums, and most multi-family residential units regardless of date of construction. Reasons for a just eviction include: failure to pay rent, breach of lease, nuisance, criminal activity, and failure to grant reasonable access. Landlords must pay relocation assistance to tenants for evictions based on necessary repairs, owner move-in, removal of unit from rental market, and demolition of unit. Relocation assistance under this provision would constitute 3 months rent for a similar unit.
San Mateo – Measure Q
Measure Q is very similar to Measure R, with the key difference being that no existing law needs to be repealed to allow for rent control.
Like Burlingame’s Measure R, Measure Q would set a base rent for each tenancy and limit subsequent rent increases. Base rents would be determined by the amount the tenant paid on September 21, 2015. For tenancies beginning after that date, base rents would be the rate paid upon initial occupancy. The limits on rent increases are the same as Measure R – once annually, in an amount equal to the increase in Consumer Price Index (but no greater than 4%). Landlords and tenants can petition for higher/lower rents for reasons similar to those described in Measure R.
The just cause eviction provision in Measure Q is almost identical to what is described in Measure R, except that the amount of relocation assistance paid to a tenant when applicable has not yet been determined. It will be decided by City Council within 6 months of the Measure passing.