Voters decide whether San Francisco’s new rent control order will take effect_1

San Francisco’s rent control regulations are poised for a significant change, following a unanimous vote by the city council last Tuesday. The new legislation will extend the years of buildings covered by rent control from 1979 to 1994, potentially protecting 16,000 housing units from rent increases. However, the enactment of this law hinges on the outcome of Proposition 33, which California voters will decide in November. This proposition aims to overturn the Costa-Hawkins Rental Housing Act, originally passed in 1995.

The Costa-Hawkins Act governs rent control across California. Previous state-level attempts to modify this law in 2018 and 2020 have failed, leaving uncertainty about whether the current proposition will succeed.

Aaron Peskin, the San Francisco City Council President and proponent of the new rent control measure, emphasized that rent control will appear on the ballot regardless of public opinion. As an advocate for tenant rights, he views this as an opportunity to enhance protections for renters.

Peskin is also a candidate for mayor this election year, and tenant protection through rent control is one of his key campaign priorities.

The new legislation faces opposition from housing advocates, labor groups, and a coalition of developers who express concern that it could hinder newly constructed housing projects from recouping their costs and undermine their ability to service loans. Critics argue that this proposal could severely dampen the motivation to build new housing in San Francisco, exacerbating the existing housing crisis.

During a recent visit to the upscale Russian Hill neighborhood, where the average home price is around $1.8 million, tenant Recheal Chang shared her experience. Since moving in 2012, she has paid only $500 per month thanks to rent protection, while market rates now range from $4,000 to $5,000. “It’s a double-edged sword,” Recheal admitted. “On one hand, I’m saving a lot of money, but on the other, it means I might never move out and buy a new place.”

Tenants like Recheal are common in District Three, which includes neighborhoods like North Beach, Chinatown, and the Financial District.

Initially, Peskin proposed extending rent control to all buildings completed before November of this year. However, under existing state law, local governments cannot impose rent control on units built after February 1995 or retroactively apply it to earlier years. Proposition 33, if passed, would give local governments the option to implement rent control but would not mandate it.

The final outcomes of this new legislation and Proposition 33 are likely to have profound implications for San Francisco’s rental market and housing supply. Balancing the interests of tenants and developers will be a critical issue in the coming months, especially in light of the current housing shortages.