In San Francisco, only apartment buildings built before 1979 are subject to rent control. But a new ordinance, passed unanimously Tuesday by the Board of Supervisors, would move the cutoff date to 1994, placing an additional 16,000 units under those protections.
But there’s a catch. The expansion can’t go into effect unless the Costa-Hawkins Rental Housing Act, a 1995 state law that governs rent control, is repealed by voters in November through the passage of Proposition 33.
That’s a big if. Statewide ballot measures meant to overturn Costa-Hawkins failed in 2018 and 2020.
“Like it or not, rent control is on the ballot,” Supervisor Aaron Peskin, who authored the ordinance, said at Tuesday’s meeting. “And this is a chance for us, who say we are advocates for renters, to commit to expand protections.”
Peskin, who is running for mayor and has made rental protections a key priority, had to scale back his original ambitions for the bill at the eleventh hour when a coalition of housing activists, labor groups, and developers expressed concern that it would disincentivize new housing construction.
In a letter delivered to the board ahead of the vote, the coalition wrote, “This legislation denies the builders of recently constructed housing the ability to recover construction costs and jeopardizes their ability to repay their loans.” The group also argued that the proposal would put San Francisco at a competitive disadvantage for housing production compared with the rest of the region.
Originally, Peskin proposed expanding rent control to all buildings built through November of this year.
Peskin this year introduced bills aimed at banning rent-setting software, stymying the redevelopment of legacy businesses, and lowering the upzoning that had been approved in his district.
State law prohibits local governments from amending rent control ordinances on units constructed after February 1995 or back-dated to when the locality passed its ordinance — 1979, in the case of San Francisco. Prop. 33 wouldn’t require local governments to regulate rents but would give them the option to do so.
Before he amended the cutoff from 2024 to 1994, Peskin, as president of the board, waived the standard 30-day notice period for proposing major legislative changes so that the ordinance could get a vote from the board before Election Day. The timing of the maneuver led to speculation from some supervisors that the bill was politically motivated, related to Peskin’s mayoral campaign.
“I don’t understand why we’re rushing it today,” Supervisor Joel Engardio said at the meeting. “From my understanding, this is moot until the [November] election. … So let’s just do it right in a couple of weeks.”
Supervisor Ahsha Safaí, another mayoral candidate, tried unsuccessfully to delay the vote by a week and said he’d like to create a committee of financiers, developers, and unions to analyze the legislation.
“The debate around Prop. 33 is extremely confusing,” said Supervisor Hillary Ronen, a sponsor of Peskin’s legislation. “But if it passes, we’re going to make hundreds of thousands of buildings in San Francisco rent-controlled. That is a clear and simple message.”
Proponents and opponents of Prop. 33 both argue that their position supports affordable housing. Proponents say the measure would allow for more affordable rents, while critics say it would limit construction of affordable housing.
A 2019 Stanford study on the effects of rent control on the San Francisco housing market found that the protections help prevent displacement, especially for racial minorities, but noted that “local popular votes thus appear to be an inefficient way to set rent control policies.”
Additionally, the report found that landlords may respond to rent control by converting properties to condos or redeveloping them in a way to exempt them from regulations.
During Tuesday’s heated debate, Peskin accused Safaí of intentionally delaying the vote — a claim the latter denied.
“Supervisor, you saw me in the hallway moments ago, but you didn’t say anything [about your concerns],” Peskin said. “This is just a delay tactic on your part. It’s going to send a message to voters that you don’t support rent control.”
Safai acquiesced and voted along with his colleagues to approve Peskin’s measure.