SAMCAR Opposes Rent Control & "Just Cause" Eviction Ordinances

Rent Control Threatens San Mateo County, Please Urge Your Elected Officials to Oppose Rent Control

Rent control (AKA rent stabilization) is looming in San Mateo County. It is one of the foremost threats to private property rights and will impact home owners and tenants. A group of San Francisco-based organizations as well as few local groups such as the Housing Leadership Council, the San Mateo Labor Council and the Sierra Club have been lobbying and holding demonstrations, demanding that rent control be adopted supposedly to create affordable housing.

It's time the elected officials heard the other side of the story. Below is a synopsis of rent control/rent stabilization and a message for you to customize and send to the elected officials. Rent control has caused massive devastation to the housing market in the places where it's been enacted, such as San Francisco, Berkeley, and Oakland. It must not be allowed in San Mateo County.

See also:

Op-Ed: Local Housing Shortage Drives "Market Rate"

SAMCAR Supports Quality Affordable Housing, Not Rent Control

About Rent Control/Rent Stabilization

What is Rent Control/Rent Stabilization?

At its core, rent control/rent stabilization establishes a limit on residential rental rates. Under state law, a city may NOT dictate the initial rent that a landlord charges. Rent control/rent stabilization restricts how much rents can increase after the initial market rate rent is set.

What's the Difference Between Rent Control and Rent Stabilization?

Rent Control or Rent Stabilization… the terminology is academic as both arbitrarily limit the rate of return on investment property.  Those advocating such policies will counter that there is a difference. There is no difference.

To what rental units does Rent Control apply?

Rent control/rent stabilization may only apply to apartments with a certificate of occupancy prior to February 1, 1995 per state law (the 1995 Costa-Hawkins Act). The majority of all rental units in San Mateo County were built prior to February 1995. It also does not apply to single family homes or condominiums that are for rent.

How much can rents be raised under Rent Control?

That is up to local government. Many communities with Rent Control/Rent Stabilization ordinances peg annual increases to the Consumer Price Index (CPI). The CPI does not reflect any capital costs that rental property owners must incur for maintenance. Historically in those cities with rent control, the allowable annual rent increase has been 3 percent.

What is vacancy decontrol?

Under California law when a tenant in a rent-controlled unit leaves, the unit is decontrolled which allows the landlord to rent the vacant unit at market rate. When a new tenant signs a lease agreement , however, subsequent rent increases are then regulated by the rent control ordinance.

Does Rent Control constrain new construction?

Yes. One documented effect of enacting rent control/stabilization is to retard investment in residential rental units. As a result, the quantity of rental units is smaller, and not so amazingly, this holds true not only for where rent control is in place, but even where it is only threatened.  The mere anticipation of rent control is enough to have a chilling effect on investment in the housing market.

If Rent Control is enacted, what other laws must be adopted as well?

A rent control ordinance always requires the enactment of other tenant laws to rectify the problems caused or created by rent control/rent stabilization. These other policies include Limited Eviction Justification (a so-called "just cause" eviction ordinance);  Compulsory Relocation Benefits: Mandates rental property owners to give displaced tenants an unspecified monetary payment to help them find housing that they can afford; Creation and Funding of Rental Review Boards: Rent control requires a Rent Review Board be created, staffed and maintained to arbitrate rental rates and rent increases. These bureaucracies average $4.7 million a year to administer and are funded by charging a per unit fee on all rentals which is paid for by the property owner, and ultimately, the tenants.

Just Cause Eviction ordinances create many unintended consequences, one of which is an unhealthy, uncomfortable, or even dangerous living environment for neighboring tenants who report a nuisance to the property owner.  In cities where Just Cause Eviction ordinances are in place, property owners do not have the ability to evict tenants who have been repeatedly reported to harass, bully, or threaten neighbors or even commit petty crimes for which solid proof does not exist.

Contact Your Elected Officials

Using the following sample message template, copy and past the text into an email, personalizing the noted fields (recipient, location, property information) and send it to the the elected officials listed below based on where your rental unit is located.

If you do not own or manage rent property, please pass this "Call For Action" to those persons and businesses who do.

Sample Message

(Name of Elected Official),

Regarding the issue of rent control in (FILL IN LOCATION), (FILL IN YOUR NAME OR COMPANY) manage or own a (FILL IN PROPERTY DESCRIPTION) in (FILL IN LOCATION).  Our tenant(s) pay (below market rent or fair market rent) of $X,XXX per month. Market rate for the property is approximately $X,XXX per month. (IF appropriate, note length of tenancy.)

We are just one example of the hundreds of rental property owners and managers in (FILL IN LOCATION) that keep their properties well maintained and are willing to accept below market rate rents. That will end if rent control is considered much less adopted.

Rent control is not needed because of the allegations of a few tenants and claims from groups outside San Mateo County as well as local special interest organizations. It would be devastating for owners and investors that have chosen to provide rental housing opportunities. In addition, developers will not build if investors do not invest or purchase the housing units, which many investors will refuse to do if rent control is enacted.

Rental rates should be determined by the market, (supply and demand) and even then, resources are available for those tenants that are struggling with their rent. Promoting these programs as well as incentives to create more affordable housing is where (FILL IN CITY) should be headed. Not rent control. Thank you.