Rent Control Grows in San Francisco

San FranciscoAs housing gets more expensive across the country, ideological people push harder and harder for one-sided solutions like rent control. The latest development in San Francisco will either make you laugh or cry.

Citing “just cause” arguments used by other tenant advocates, the city of San Francisco adopted an ordinance that restricts a landlord’s ability to evict for nuisance. It also limits a landlord’s ability to raise the rent following a renovation.

Tenant advocates say that many evictions filed “for cause” are really motivated by a desire to raise the rent. They cite one case in which a Chinatown landlord tried to stop tenants from hanging underwear outside their apartments, a practice considered normal for the neighborhood.

The more surprising measure may cause San Francisco’s housing stock to slide toward disrepair: Landlords can no longer evict for capital improvements, or else if they do, the apartment must be offered to the next tenant at the pre-renovation rent. This effectively removes the financial incentive to upgrade an apartment or an entire building any time there is a hold-out who won’t willingly vacate.

Sure, landlords can start paying hold-outs to leave, but in that case, hold-outs should unionize and demand sums that scale with the net present value of the capital improvements. Major real estate deals could be stopped. It will be interesting to see what this measure does to San Francisco’s housing stock over the next ten or 20 years.

Read the full article at SFGate.

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