Rent Control Talking Points

When discussing the issue of rent control at a public hearing, it is often helpful to bring up your personal experience and expertise as a REALTOR® serving rental housing providers. It is also helpful to bring along any rental housing providers that you work with, so they can bring their real-world expertise to the table.

Here are other talking points:

• In recent months the Council has discussed the topic of a rent stabilization ordinance for its residents. However, there are already State laws in place to provide protections for tenants; AB 1482 that protects tenants from rent increases over 5%. AB 1482 further protects California renters from large rent increases as a result of the ongoing housing emergency that could drive them from their homes. AB 1482 also sets a maximum percentage for rent increases based on a Consumer Price Index formula.
• AB 1482 already guards against the most drastic and disruptive rent increases in places where tenants have no other protections. The bill covers all rental units, deed- restricted affordable housing, dormitories and other units that have more restrictive requirements. It also would prohibit a landlord from terminating a lease in order to avoid this requirement. This bill affects all rent increases after March 15, 2019.
• AB 1482 already also includes two different types of Just Cause provisions: At-Fault and No-Fault. “At fault” termination of tenancy is generally based upon a tenant’s breach of the lease, among other reasons, and does not require the payment of relocation assistance or rent waiver . “At fault” reasons include non-payment of rent, nuisance, criminal activity, refusal to allow entry, and breach of a material term of the lease. “No fault” termination of tenancy is allowed when the tenant has not breached the lease and will require the landlord to pay one month’s rent in relocation assistance or grant the tenant a rent waiver. “No fault” reasons include owner occupancy, withdrawal from the rental market, substantial remodeling and compliance with government order to vacate the property. The just cause eviction rules only apply to tenants who have been continuously and lawfully occupying the property for 12 months.
• Additional Rent Control will only impact those that we call “mom and pop” housing providers. If you expand rent control, these housing providers cannot absorb your new policy and will either leave the market or likely sell those rental units to “Corporate Landlords” who may not live in our community. Corporate landlords may have the means to work with a strict regulations as the one you are proposing, but small operators and those housing providers that live in Larkspur, as those that have spoken at your meetings, will be forced to sell. Is the City Council prepared to take responsibility for inviting corporate landlords into our community?

Why do REALTORS® oppose rent control?

• What’s important to remember is that California provides some of the strongest protections for rental in the nation. That being said, restrictive rent caps only stifle housing production and negatively impact our communities, but first and foremost, rent control a symptom of a larger problem, and that’s the lack of housing supply and ownership housing pathways that exist, one needs to look no further than other cities that have tried it to see that rent control doesn’t solve the larger underlying issue, and in fact, perpetuate housing challenges in communities. Cities like New York, Los Angeles, Berkeley and San Francisco, for example, have lived with rent control for decades and are no closer to solving their affordability issues now than they were when those programs were adopted. Here’s why by artificially constraining rental prices, rent control removes the incentive for landlords to improve their properties.
• A landlord who does not receive a fair rate of return on the property cannot afford to spend money to maintain or improve it.
• When property maintenance declines, it has a spiraling effect on the community. Declining property maintenance lowers values. This lowers tax revenue to local government. Less tax revenue undermines government maintenance and services, and the cycle continues.
• Rent control is a disincentive for builders and investors to bring new properties into the rental market. Fewer properties coming onto the market constrains an already tight supply of rental housing, putting even more upward pressure on the price of existing rentals. In other words, rent control exacerbates the very problem it is designed to solve.
• Only 1 in 5 CA households can afford a single-family home. We believe in policies that create pathways to homeownership to close the homeownership gap that exists in our state.
• This includes downpayment assistance programs like the California Dream for All program, which is an innovative down payment assistance program for working Californians, allowing the state to invest alongside first-time home buyers by providing a 20 percent down payment, and aims to pave the way for a more equitable California where homeownership is possible for all.
• Again, that’s why there needs to be a focus on policies that promote creating housing supply and ownership housing pathways.

Why are REALTORS® concerned about “Just Cause” Eviction?

• As REALTOR®s, we understand the opportunity that homeownership provides – it opens the door to true housing and economic security, better health and educational outcomes, and building generational wealth.
• There needs to be a greater focus on promoting pathways for hardworking Californians, and as we work to create these opportunities, we also need to support policies that promote an additional supply of rental housing opportunities.
• The reality is that policies like this do not help, but hurt, by creating a disincentive to invest in rental housing at a time when California desperately needs more homes.
• As these opportunities dwindle in a town, city or region, working-class families, seniors, and others in need experience the most harm.

That’s why the focus must first-and-foremost be to address the root cause of the homeownership gap that existing in our state, and that’s the lack of pathways to support families to achieve the dream of homeownership, while advancing policies that support keeping a steady pipeline of housing opportunities available.