Santa Rosa rent control misses the mark

 columnist misha herbert.

columnist misha herbert.

Santa Rosa may be on its way to joining the 12 other cities with current rent control policies, including Beverly Hills, San Jose and East Palo Alto.

On May 3, following four hours of public testimony, the Santa Rosa City Council voted in favor of a rent control ordinance 4-3. This controversial topic is expected to face challenge by the public when it reaches the ballot box. If passed, this ordinance will limit rent increases to three percent annually, and prevent unfair evictions of tenants.

As a Sonoma County renter, I initially viewed the limits on rent hikes and unfair evictions as beneficial, if not necessary. But a deeper dig into the economics behind rent control proves to be contradictory: If this bill survives past the ballot box, it may do more harm than good.

Liberal economist Paul Krugman wrote in the New York Times in 2000, rent control is “among the best-understood issues in all of economics, and — among economists, anyway — one of the least controversial.” In fact, in a survey of close to 500 economists performed by the American Economic Review, 93 percent agreed rent control reduces the “quantity and quality of available housing.” The message is clear: Rent control doesn’t work.

It’s simple logic that when you take away the opportunity for a return on investment for property owners, those very property owners will cease to have incentive to provide quality housing, thus decreasing the supply and overall availability of housing. In effect, in an area where we so desperately need more affordable housing, we would have even less.

City officials and industry professionals also agree with this reasoning.

Santa Rosa Mayor John Sawyer was among group of public officials opposing this ordinance. “I don’t think it’s a solution to our housing problem,” said Sawyer, “I think this is creating a problem in the effort to trying to solve another one.”

Daniel Sanchez, director of government affairs for the North Bay Association of Realtors, agrees with Mayor Sawyer. “The likely result is that some landlords would get out of the rental business, reducing the number of rental units on the market at the time they’re needed most,” he said.

While the rent control portion of this bill may be missing the mark, it’s undeniable that renters should be able to feel secure with their occupancy. The just-cause eviction policy is a bare necessity for Sonoma County tenants.

Pending approval, the ordinance would cover all rental properties in Santa Rosa. It would dictate that landlords provide adequate reasoning prior to evicting renters. Such fair reasons would include “habitual” nonpayment of rent, breach of contract, creating a nuisance or withdrawal from the housing market.

Sonoma County is currently facing the most dramatic housing crisis in decades. Vacancy rates are below one and a half percent, and homelessness has risen to over 10,000 people countywide.

Now, more than ever, it’s clear that what we need is more available housing. Rather than focusing on limiting the value of the housing we currently have, we should be investing in building new affordable housing.