New Housing for Whom: Addressing Criticisms of Rent Control Ballot Measures in the Bay Area

This November will be very important for tenants in the Bay Area. Ballot measures commencing and expanding rent control and eviction control protections will be considered by voters in the cities of San Mateo, Oakland, Alameda, Richmond, Burlingame and Mountain View. If these measures pass, they will add tenant protections to those that already exist in San Francisco, Oakland, Berkeley and East Palo Alto, and could impact over 285,000 Bay Area residents.

Because rent control ballot measures are popping up across the Bay Area this year, opponents of rent control initiatives have come out of the woodwork. One popular criticism that we are increasingly hearing from rent control opponents is that economists don’t believe rent control works. The contention is that economists don’t believe rent control would help fix the housing crisis.

But this underscores fundamental differences in how the two sides view what is important in mitigating the effects of the housing crisis. What exactly is the housing crisis, who is it affecting and how can we minimize the harm it’s causing?

In the view of rent control opponents, the housing crisis is simply about low supply. In their view, rent control protections are bad because they will add no new housing to the current stock. They see the issue in simplistic supply and demand terms, rather like economists. They see development as the only solution to astronomically rising rents. They believe more newly constructed housing is the way to defeat what they see as the housing crisis. And since rent control does not add more new housing, it is not worth doing.

However, the focus on supply as the central problem to be solved in the housing crisis ignores bigger issues that rent control critics are avoiding. Who has access to the new housing (i.e., who can afford to live there)? Who is affected by rising rents? How are communities changing because of rising rents? How do we protect people who are being negatively affected by increasingly high rents?

The answers to these questions cannot be found only by focusing on supply and new development. Simply building new housing will not protect existing communities and low-income tenants. As we’ve seen in San Francisco along upper Market Street, the Octavia corridor, Hayes Valley, China Basin and SoMa, to name a few neighborhoods, new housing developments are largely shiny, luxury structures that effectively exclude current residents of those neighborhoods and those unable to afford the high prices they demand. Additionally, many of these new housing units are not likely to be added to the rental market, but rather will be used by their owners as primary and secondary homes. Thus, increasing the supply of housing doesn’t benefit everyone.

Instead, what the critics aren’t acknowledging is that rent control helps to keep communities diverse and helps to protect housing for those who are not the top earners. It gives a level of stability because tenants can expect and plan on their rents not being raised. It also gives greater stability to neighborhoods whose characters could otherwise rapidly change. It means a neighborhood will not be comprised solely of people who can afford drastically increasing rents. It allows families with children to stay in communities and schools they have known for years.

Another criticism of rent control is that it prevents new housing from being constructed. The argument is that real estate developers will not want to build in a place that has rent control. They treat new housing and rent control as mutually exclusive concepts. Yet what is often misunderstood is that rent control does not affect newly constructed units. Real estate developers could build all the new housing they want and none of it would be subject to rent control in any of the jurisdictions that have rent control now or those that have rent control measures on the ballots. That’s because California law currently exempts newly constructed units from being subject to rent control. Therefore, rent control does not affect new housing and there’s no reason why developers cannot construct new buildings in rent control jurisdictions. We can have both rent control and new housing.

A more fundamental problem with the view of the housing crisis as being solely an issue of no new housing is that there will never be enough immediate new construction to drastically decrease rents. Housing projects take time and money. We’ve seen buildings constructed in San Francisco, but the rents citywide continue to increase. Unless there was very fast, simultaneous construction, new housing won’t decrease rents. And, even if new units were constructed, there would be no check on future rent increases because rent control doesn’t apply to newly constructed housing.

In the end, opponents of rent control seem to be interested only in looking at the issue through supply and demand. They define the housing crisis as low housing supply with potential for increasing the housing stock. They do not consider loss of community or neighborhood stability. More housing alone is not the only solution to the housing crisis and should not be a reason to deny rent control to hundreds of thousands of Bay Area residents who are suffering under increasingly costly rents. Without more, new development does not protect low-income tenants or the character of the communities we live in.