Point: Sacramento Needs Rent Control

Back Commentary Jun 11, 2018 By Cathy Creswell

This is the point in a point/counterpoint on rent control. The counterpoint, “Rent Control Would Do Major Harm to Sacramento’s Future,” can be found here.

Between 2016 and 2017, Sacramento suffered a staggering average 9.9 percent rent increase — the largest year-to-year increase in the country. Compounding this hardship, Sacramento landlords evicted 2,044 households in 2016, which was the third-highest number among California’s 57 largest cities, according to a study by the Eviction Lab at Princeton University.

Escalating rents and the eviction crisis directly relate to the growing number of people experiencing homelessness. According to a recent report by the California Department of Housing and Community Development, every $100 median rent increase is associated with between a 15-39 percent increase in homelessness. Sadly, this trend shows little sign of slowing down in 2018.

Related: The State’s Most Controversial Housing Bill in Years Just Died

Related: Rent Control Would Do Major Harm to Sacramento’s Future

Sacramento stands at a crossroads. Will it remain a place where teachers, firefighters, nurses and retail clerks can live in the same city as the people they serve? Will Sacramento maintain its identity as a diverse city; a place to put down roots and raise a family? Or will it succumb to the fate of other metropolitan areas, where the people who work to make our city run can’t afford to live here? This November, Sacramento voters can answer these questions by voting for the Sacramento Renter Protection and Community Stabilization Charter Amendment.

Landlord lobbyists argue the path forward isn’t up for debate — the only solution is increasing the supply of market rate housing. Our best hope, they argue, is to wait years for more, mainly luxury housing to be built, and eventually, if we’re lucky, the increased supply will bring rents down.

The Housing 4 Sacramento coalition knows this approach will not work. As a coalition of labor and affordable housing experts, and civil rights and community activists, we advocate for a holistic solution to the housing crisis: long-term investment in constructing affordable homes, and protections against rising rents and unfair evictions.

The ordinance balances private property rights by ensuring a fair return on investment and protecting basic human rights to shelter. The ordinance ensures a fair return for landlords because it allows for a 2-5 percent rate increase every year (pegged to the Consumer Price Index) and includes a process for raising rents if landlords make investments in their property.

By limiting rent increases each year to a reasonable percentage tied to inflation, rent control would keep people in their homes. Research supports rent control’s efficacy. The Urban Displacement Project, a research effort on housing displacement between UC Berkeley, UCLA and Portland State University, illustrated the connection between areas with rent control policies and lower displacement. Researchers at Columbia and New York University studying displacement in New York, as well as a University of Washington study on gentrification, revealed similar findings. An analysis by the business-aligned Bay Area Council Economic Institute showed rent control policies in their region prevented 16,000 households from being displaced.

The central argument leveled against rent control is that it would prevent new housing development. Yet, the experience in other California cities with rent control shows this to be demonstrably false. These cities have some of the highest rates of development in the state, including Los Angeles and San Francisco. Rent control has been so effective at stopping displacement and protecting our communities that 10 California jurisdictions are pursuing some form of rent stabilization through this November’s ballot, including Long Beach, Santa Cruz, San Diego, Santa Rosa and Pasadena.

Rent control is simply the right thing to do. Rising rents force fellow Sacramentans to make terrible decisions. Decisions like paying the rent versus feeding their children or seeing a doctor; or whether they pull their children from the school they love and move miles away from their jobs and neighborhoods to find affordable housing.

For those that love Sacramento, watching it transform from a place of community stability to a place of disruption is painful and unnecessary. The proposed rent control measure balances private property rights by ensuring a fair return on investment, and protecting a Sacramentan’s basic right to shelter and having a place to call home. Implementing rent control, along with increased efforts to build more affordable homes, would ensure Sacramento is the inclusive and prosperous city we all envision.

Comments

Matthew (not verified)June 11, 2018 - 7:10am

On what planet does rent control - which invariably lowers the quality and quantity of rental housing - help tenants?

Matthew (not verified)June 11, 2018 - 7:10am

On what planet does rent control - which invariably lowers the quality and quantity of rental housing - help tenants?

Fernando (not verified)June 11, 2018 - 8:06am

The only reason housing hasnt fell apart in CA is because of costa hawkins. Thats why cities are still building new apartments. To get the protections this law peobides against rent control. As an owner of two homes i worked my butt of for i reject rent control. Tell the lazy people to work harder to get what they want.

Jerry Rioux (not verified)June 11, 2018 - 1:26pm

Wow! I've known and respected Cathy Cesswell for 40 years. She's always been a rational and moderate market-oriented housing advocate. My experience was that she always advocated for incentives to improve the market, rather than strict controls on the market. Things must be horribly wrong with the rental market in Sacramento for her to advocate for rent control.

If Cathy believes that Sacramento needs rent control, Sacramento voters should believe her and vote for rent control.

Deniece Ross-Francom (not verified)June 12, 2018 - 8:21am

Creswell says in her article, "The ordinance balances private property rights by ensuring a fair return on investment." That just isn't true. Capping rent increases at CPI doesn't factor in that all the costs of a rental house - utilities, insurance, maintenance, etc - aren't capped. And she tellingly doesn't talk about just cause for eviction which severely limits the situations in which a landlord can give a tenant notice to move out without paying for their relocation. If the owner wants to move a family member into the house, move into the house themselves or wants to sell it they have to pay the tenants a relocation fee starting at a MINIMUM of $5500. Where's the "balance" of private property rights in that? Additionally, we'll have a new elected board that will oversee landlord/tenant just cause disputes and set the fees they charge landlords for those services, AND the rental board will set their own salaries..... Lastly, it won't take years to see new affordable housing in our city. There are new apartments coming available very shortly and multiple other projects under construction (they were started before the rent control initiative became public). Let's support our developers and builders in building more of these homes rather than slamming the door in their face. We can't regulate our way out of this problem, we have to build our way out.

Marty (not verified)June 12, 2018 - 9:09am

What was not mentioned is the potential elected Rent Board, which can set their own pay, benefits and pensions, will add 20 new city employees and is estimated to cost over $5 million of tax payer dollars. What a waste of money! A poll of economists found that 93% of them agree that rent control has a negative impact on housing supply and quality. Supply is indeed the problem, but it will not take years to build affordable housing if city leaders and the community resolves to do it.
It was also not mentioned that Pasadena and Long Beach failed to get enough signatures to put a rent control measure on the November ballot. This rent control initiative is the wrong path. The focus needs to be on building more housing.

Visitor (not verified)June 12, 2018 - 1:45pm

If you can't afford than move, I saw what rent control did in LA years ago, it made nice neighborhoods into ghettos! Landlords will NOT fix properties if they are under rent control, think about it!

Visitor (not verified)June 12, 2018 - 1:48pm

You think Sacramento is ghetto now, wait to see what rent control does, landlord will not be able to afford to put money into properties! Look what it did to LA areas, turned those areas into g
Ghettos!

Thomas (not verified)June 12, 2018 - 2:15pm

"The ordinance balances private property rights by ensuring a fair return on investment" No it does not. The ordinance freezes rents as of an arbitrary date and then presumes that that was a fair rate of return. So whether you're a slumlord or large corporate housing with higher rents or whether you'd mom-and-pop landlord who is kept his rents down. Both are frozen at whatever the rate was on that arbitrary date. The ordinance then allows each to raise the rent a maximum of 2.5%. Landlords who kept their rents low are forever screwed. Slumlords and corporate landlords who kept their rents high are forever rewarded. Then the ordinance says that you can request an increase in your rent rates for a fair return on your investment. Then it turns around and immediately says the assumption of a fair return on investment is that return which the landlord was receiving on that arbitrary date.
Next, rent control proponents bring out the studies from UC Berkeley UCLA that show a connection between areas with rent control policies and lower displacement. Of course, those tenets the got a sweet deal because their rents got frozen at a lower than market rate will never move. So, 25 to 30% stays put indefinitely. They got a sweet deal and the landlords can't raise the rent and can't get rid of them. So 1/4 to 1/3 of the whole housing market will never be available to people moving in because those tenants there will stay put. The apartments that turnover the fastest are those owned by the slumlords and large corporate housing. When those tenants move out, slumlords and corporate landlords get to reset those rent levels to whatever they feel the market is. With less supply because of less turnover, rents of available apartments will always be higher because of rent control.
I am a landlord. And I might even agree that rent control might not be such a bad thing if the proposed ordinance was actually balanced and fair. But it is not. How can an ordinance that supports slumlords and corporate housing while penalizing the decent landlord's who have kept their rents down be a good thing for our rental pool as a whole? No. Until somebody intelligent actually writes a proposed ordinance that is actually fair and balanced, all landlords need to fight this concept of private subsidies for housing being placed on the backs of property owners who've worked hard and invested in our communities.

Visitor (not verified)June 13, 2018 - 12:06pm

The article cites San Francisco and Los Angeles as successful examples for rent control "stopping displacement and protecting our communities?" Well, there you have it. If you want our housing market to turn into LA or SF with high costs, low quality, and massive homelessness, rent control is your ticket.

Barb L (not verified)June 13, 2018 - 2:01pm

Responsible Rents: YES
Rent Control: No
The elected rent board is expected to cost more than $5 million per year ...wouldn't this money be better served applied directly to increase affordable housing stock? How can the answer to what is obviously a housing shortage be to create more elected officials without proper oversight? Don't be fooled..rent control is about so much more than just the monthly rent.

Visitor (not verified)June 13, 2018 - 4:49pm

Increasing the housing supply is the only way to bring down rents. Seattle is proof positive that rent decrease IS the outcome of building. Among the 25 largest cities in the US, Seattle's rent grew steadily in 2015, 2016, and 2017. In 2018, after a year of constructing LOTS of new apartment units, rents not only didn’t grow - rents declined. THIS CAN HAPPEN IN SACRAMENTO IF THE CITY REMOVES BARRIERS FOR BUILDING NEW UNITS. Rent control is not the answer. It will freeze supply and have the opposite impact.

Visitor (not verified)June 16, 2018 - 10:06am

The comments section here is heavily skewed against rent control because the people who really need it are too busy working two jobs and looking for a home to sit on the Internet and spam every article they find. Landlord and apartment lobbying groups also have employees and board members, in addition to their membership, who find it a valuable use of their time to sit on the Internet and make it look like there is a huge base of support. In fact, this is a moneyed minority that has the luxury of time to scream longest and loudest. The real proof of what THE people want is in the hundreds of thousands of signatures that have been gathered in just a few weeks. The scales have finally tipped, landlords, you squeezed too hard and now you see it beginning to run through your fingers. No matter how you scream, the correction is coming and making your living off of human misery is coming to an end.

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