The Pros And Cons Of Rent Control

opinion Essay
889 words
889 words

Although the recent tech boom in San Francisco has been blamed for the increased housing demand and the lack of affordable rental housing in the City, the reality is that the shortage of affordable rental housing been steadily climbing for the last 35 years. Rent control is oftenat the center of the controversy regarding the affordable housing shortage. In response to high inflation, and escalating rents, San Francisco’s Residential Rent Stabilization and Arbitration Ordinance was passed in 1979 (Forbes, Sheridan, 1999). Rent control imposes restrictions on landlords in regards to rent increases and evictions. It is estimated that seventy percent of San Francisco’s rental units are under rent control (Marti, Shortt, 2013). Because of the limited rent increases allowed, tenants living in these rent controlled apartments seldom move out, which severely impacts the vacancy rates in the City. Although the vacancy rate among rent-controlled units is extremely low, there are occasions when a tenant may vacate a rent control unit (a job out of the area, the decision to purchase a home, etc.). When a rent-controlled unit is voluntarily vacated, the landlord is allowed to raise the rent to market rates (this is called vacancy de-control); then the rent control annual increase takes effect on the new rent. A landlord will often raise the new rent to the highest possible price the market will allow, in an attempt to recoup the financial loss he is incurring on the units still under rent control. Because of the new higher rent, the previously affordable unit is no longer considered affordable; which then impacts the inventory of affordable housing in San Francisco.
“Rent control creates incentives for owners of controlled units to move thes...

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...t of owning a rental property is more than the income it produces. The bottom line is that owning a rental property is a business, a way of making a living for most property owners, and must be viewed as such. My idea is to develop a policy that requires all residential multi-unit buildings to provide a percentage of rental units to serve the following populations: economically disadvantaged, veterans, and middle income. Resources such as low interest capital improvement loans, government subsidies to offset low income rates, allowable rent increases based on tenants length of tenancy and change in income, will be made available to property owners who offer more than the required number of units at affordable rents. The funding for these would come from the newly formed San Francisco program, Housing Opportunities Promoting Equality, known as the H.O.P.E. Program.

In this essay, the author

  • Explains that the recent tech boom in san francisco has been blamed for the increased housing demand and the lack of affordable rental housing in the city.
  • States that rent control creates incentives for owners of controlled units to move these units into owner-occupied sectors.
  • Opines that a policy that rewards landlords rather than penalizes them should be looked at closely to remedy the affordable housing shortage.
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