Last year, East Oakland resident Norma Sanchez’s landlord increased her family’s monthly rent by $1,400 — a 100 percent increase. Six of Sanchez’s neighbors faced similar hikes by the same landlord. Few of us, whether we rent or pay a mortgage, could afford such an increase in our monthly housing costs.
All these families rented single-family homes and therefore had no protection from such exorbitant increases. Under California’s Costa-Hawkins law, Oakland’s rent-control ordinance cannot apply to single-family homes. And the number of California tenants living in single-family homes, many of them bought out of foreclosure by investors, is up to nearly 8 million.
State legislators recently introduced a package of three bills that would make huge strides toward alleviating this housing crisis and protecting families like Sanchez’s. AB36, by Assemblyman Richard Bloom, D-Santa Monica, would allow communities to expand rent control to single-family homes, with exceptions for landlords who own only one or two properties, and to units built 10 or more years ago. AB1482, by Assemblyman David Chiu, D-San Francisco, would cap rent increases statewide to protect tenants from the kind of gouging suffered by Sanchez’s family. And AB1481, by Assemblyman Rob Bonta, D-Alameda, would protect tenants from arbitrary eviction, requiring just cause.
California must regulate rent increases. Much of the rental housing in California is owned by major corporations, and just as we regulate the rates that utility corporations are allowed to charge for water, gas and electricity, because we consider them essential needs, we must regulate what landlords can charge for the basic need of shelter. Utility investors are entitled to fair returns, and so are real estate investors. But we don’t allow utility companies to use their monopoly power to squeeze the public, and we shouldn’t allow real estate investors to use the scarcity of rental housing to do so, either. While we should work on other, long-term solutions to the housing crisis, there is no substitute for this timely response to immediate problems.
Yuki (left) and Kyle Retzik, with their son Kosei, 10, faced a doubled rent after their landlord was foreclosed and an LLC purchased their San Francisco home. “They want to buy and flip this house instead of having a family live here,” Kyle Retzik said.Photo: Yalonda M. James / The Chronicle 2018
We should also build more housing. But we add housing at the rate of less than 1 percent a year, and it will take 30 years or more before added supply has a major effect on rents. According to Harvard’s Joint Center for Housing Studies, housing construction is slowing because vacancy is rising at the high end of the rental market, even though supply remains tight in most of the market. That’s because most tenants can’t afford new construction; they live in older housing for which the costs of construction were paid off long ago. When their rents go up, the market can’t respond by building older housing. It doesn’t work that way.
We can also subsidize construction of new, nonprofit housing that can be kept affordable for decades to come — and we should. But it will take tens of billions of dollars and several decades to build enough for those who need it.
This is why we must embrace renter protections. Millions of families are living just one rent increase away from displacement. If we want to live in an economically and racially diverse California, built on the values of equity and fairness, we must protect those families with rent regulations now. New construction alone will not cut it.
The opponents of rent regulation claim that it will discourage new construction. Study after study shows no such effect. Oregon recently passed a statewide rent regulation and just-cause eviction law with an exemption period for new construction, giving investors plenty of time to recoup most of the costs of construction and refinance while ensuring that most tenants are protected.
It’s time for California’s rent regulations to meet the urgent needs of today, not the fears and myths of decades past. Tell your state legislators to support these bills and keep families in their homes.