Policy Briefs

Proposition 10

In the lead up to the Proposition 10 vote in California, we asked: what is the demand for rent control in the Bay Area? And what does the actual coverage of rent control in the Bay Area look like today? How could it have expanded on November 7th, if voters approved Proposition 10 on the November 6th ballot? While Proposition 10 did not pass, the findings of this brief, and the conclusion that Proposition 10 would have made sense for the Bay Area are still relevant to ongoing policy conversations. Many more tenants could have been protected from rent hikes if Proposition 10 had passed. Renter protections are a key component to any suite of solutions to address the displacement crisis inflicting the region, which has resulted in further segregation and exclusion for the region’s most vulnerable residents. It is imperative for policymakers, however, to prevent the unintended consequences of rent control (i.e., deferred maintenance and landlords removing units from the rental market) with creative policies that ensure an inclusive future for the region.

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Key findings:

  • Today, around three quarters of all renter households – approximately 885,000 - in the Bay Area are not protected from rent hikes, and most of these households are also unprotected from no-cause evictions. Around 41% of the households not protected by rent control are families with children.
  • Proposition 10 could result in a significant expansion of rent control to cover tens of thousands more tenants in cities that have already passed these policies, especially for tenants in single-family rentals. Over the last ten years cities like Oakland, Richmond, Mountain View, and San Jose have seen a large uptick in the share of single-family homes being used as rentals.
  • In terms of covering “newly constructed units” in some form of rolling inclusion such as that proposed in Berkeley’s Measure Q, we find the potential impact of extending rent control to single-family rentals would have a larger impact than modest changes to the new construction cut-off year, possibly due to low production rates in the last half of the 1990s. However, instituting rolling cut-offs could provide significant coverage into the future, especially as cities have begun to increase multi-family housing production and hopefully will continue to do so.
  • It is challenging to estimate both the exact number of rent-controlled units, and the prevalence and magnitude of extreme rent hikes due to severe data limitations. Both of these facts point to the need to establish better data collection systems, which would allow jurisdictions to better assess the problems and tailor policies to address them, while increasing transparency along with other potential benefits.

SB 827

Senate Bill 827 (SB 827), introduced by Senator Scott Weiner in early 2018, aimed to rezone areas near high-frequency transit across the state to make it easier to build more densely. We partnered with our colleagues at MapCraft.io to better understand the potential implications of SB 827. Using Mapcraft.io’s development feasibility calculators for the Bay Area, we focused on trying to understand what kinds of neighborhoods would have been affected by SB 827, how much new housing capacity would have been added in different types of neighborhoods, and where communities might have expected demolitions pressures on existing units.   We looked at neighborhood type in two ways – our UDP typology for gentrification and displacement, and the Fair Housing Task Force typology for neighborhood resource level.

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Key findings:

Potential Harms

  • Nearly half of the developable land in the Bay Area that would have been subject to SB 827 was in areas experiencing gentrification and displacement pressures or that were at risk of gentrification, while only 11% of the total acres covered under SB 827 were in areas considered more affluent or exclusive enclaves.
  • Looking at financially-feasible development capacity (not just physical capacity allowed under zoning), the added capacity under SB 827 roughly mirrors the same geographic distribution of the capacity under current conditions: about 60% of the net new financially-feasible unit capacity would have been located in low-income and gentrifying areas.
  • Our closest measure of potential direct displacement is based on places where construction of financially-feasible development capacity would require demolition of existing non-rent-controlled units. Over 65% of potential residential demolitions would have occurred in low-income or gentrifying neighborhoods. 

Potential Benefits

  • When compared to development potential under today’s policies, SB 827 would have produced a six-fold increase in financially-feasible market-rate housing capacity and a seven-fold increase in financially-feasible inclusionary unit capacity - affordable units that would be required under the bill’s inclusionary housing stipulations.
  • Looking at neighborhood resource levels, SB 827 would have increased financially-feasible development potential for market-rate units six-fold in the high and highest resourced areas of the region (from 130,000 units to about 820,000 units).
  • SB 827 could have significantly increased capacity for inclusionary affordable units in the high and highest resourced areas (from 24,000 to 163,000 units). The greatest increase in capacity for inclusionary units would have been in moderate resource neighborhoods – from 20,000 to 139,000 units.

Rent Control

In many built-out neighborhoods experiencing gentrification pressures, there may be little room for new developments. Therefore, strategies for preserving naturally occurring affordable rental units are needed to counteract displacement forces in these communities. Rent control is perhaps the most well-known strategy used to control the price of non-subsidized rental units.

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Key Findings:

  • As of February 2016, only six cities in the Bay Area had some form of rent control or stabilization in place, and no jurisdiction had passed a rent control policy (that was not repealed) since 1985. This low number has since increased with the recent passage of rent control programs in Richmond and Mountain View.
  • The cities that have this policy in place have less turnover in their renter populations, indicating that rent control can be a contributor to greater residential stability.
  • State law, primarily through the vacancy decontrol provision, limits the effectiveness of rent control policies. Rent control is most effective when paired with other tenant protections, like just cause evictions policies.

Note: This policy brief is up-to-date as of February 2016.

Inclusionary Housing

Inclusionary housing policies aim to increase the stock of affordable housing at a minimal cost to the city, concurrent with development, and in the same neighborhoods as market-rate housing. Inclusionary housing usually takes the form of a zoning requirement placed on developers of new market-rate housing. In this policy brief we discuss the basics of inclusionary housing policies, including their prevalence in the Bay Area, California, and nationally, and analyze their effectiveness.

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Key Findings:

  • Inclusionary housing policies are widespread in the Bay Area, California, and nationally.
  • The policies produce many units, but these supply only a small fraction of the total need for affordable housing.

Note: This policy brief is up-to-date as of February 2016.

Condominium Conversion

When multifamily rental housing is converted into condominiums, the reduced rental housing stock may mean the loss of units that were affordable to low-income households. For this reason, many cities have implemented controls on such conversions. This policy brief gives an overview of these policies.

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Key Findings:

  • Condominium conversions were popular in the 1970s and briefly in the 1980s, but experts say they are not as much of an issue now.
  • Policies to limit conversions may focus on helping tenants as a building converts (procedural ordinances) or on limiting how many conversions may occur (substantive ordinances).
  • Loopholes in conversion ordinances limit their effectiveness.

Note: This policy brief is up-to-date as of February 2016.