This week, we have two stories on the revenge of rent control.
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we → have → control
In the midst of San Francisco's AI boom, Mayor Daniel Lurie and the Board of Supervisors are proposing a raft of new laws to tighten the city's rent control policies and prevent evictions.
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Lurie → propose → evictions
Meanwhile, in Providence, Rhode Island, incumbent Mayor Brett Smiley, who had vetoed a rent control ordinance earlier this year, lost the Democratic primary to pro–rent control state Rep. David Morales.
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who → veto → Morales
One could consider Lurie and Smiley as more moderate liberal mayors of very blue cities.
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One → consider → cities
It's notable then that neither has proven capable of stopping the leftward drift of housing policies in their respective jurisdictions.
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neither → prove → jurisdictions
In the midst of a cost crisis, Lurie is supporting even more price controls in a city that is already heavily rent-controlled.
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that → support → city
Smiley attempted to hold the line on good policy and vetoed a rent control ordinance.
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Smiley → attempt → ordinance
For his efforts, voters kicked him out of office.
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voters → kick → office
Other liberal municipal politicians who are undecided on whether to back the next rent control policy in their city may well take an unfortunate lesson away from these two examples.
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who → back → examples
Better to play it safe and just support the price controls that most big-city voters say they want, even if it comes with terrible consequences for housing supply and quality.
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it → play → supply
San Francisco's Mayor Declares a Rent Emergency
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Mayor → declare → Emergency
Headlines about San Francisco housing lately have focused on the upward pressure the city's AI boom is putting on rents and home prices.
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boom → focus → rents
Median rents are up 26 percent, reports the San Francisco Chronicle.
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Chronicle → report → ?
Newly minted millionaires are having a hard time finding a mansion.
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millionaires → mint → mansion
In response, Lurie has declared a rent emergency and announced, along with members of the Board of Supervisors, a list of policies intended to limit evictions and sudden rent increases.
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Lurie → declare → evictions
"We have lived through booms before—this time, we have an opportunity to build a recovery that is broad-based and lasting, where San Franciscans can put down roots and participate in our city's success," said the mayor in a statement on Thursday when announcing his rent emergency reforms.
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mayor → live → reforms
On paper, San Francisco already has a lot of policies to suppress sudden rent hikes.
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Francisco → have → hikes
An estimated 170,000 units (roughly 76 percent of the city's rental housing stock) built before 1980 are covered by the city's rent control law, which typically limits annual rent increases to around 2 percent per year.
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which → estimate → year
A state rent control policy that caps rents at 10 percent for units that are 15 years or older covers another roughly 33,000 units, or 15 percent of the rental housing stock.
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that → cap → stock
That leaves a little under 10 percent of rental units in San Francisco where tenants could see their rents rise as much as the market can bear.
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market → leave → Francisco
Additionally, in 2024, San Francisco became the first jurisdiction in the country to prohibit property owners from using algorithmic software when setting rents and occupancy limits on the theory that landlords were using this software to hoard vacant units and drive up prices.
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landlords → become → prices
Apparently none of that has been enough to constrain prices during San Francisco's latest economic boom.
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none → constrain → boom
To further suppress rents, the mayor is supporting a long list of new policies.
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mayor → suppress → policies
He's backing legislation that would increase the relocation expenses tenants are owed when their landlord takes their unit off the rental market.
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landlord → back → market
For rent-controlled units, he'd also cap "banked" rent increases (that is the annual rent increases a landlord saves up to charge at a later date) at 10 percent per year.
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landlord → control → year
Additionally, Lurie is proposing to spend another $3 million on legal services for tenants facing eviction and supporting a proposal by socialist Supervisor Jackie Fielder to forbid nonpayment evictions when a tenant owes less than one month's rent.
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tenant → propose → rent
All things considered, these are relatively marginal updates to the city's long list of tenant protections and rental price controls.
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these → consider → protections
The fact that the tenant protections and rent control policies San Francisco already has in place are not adequately suppressing today's rent spike would suggest that a marginal tightening of those policies won't solve the problem either.
In fact, it could make it worse.
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it → have → fact
Traditional economic theory suggests that rent control will drive up the price of uncontrolled units by increasing demand to live in the city and encouraging tenants to hold onto their below-market-priced units.
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control → suggest → units
In San Francisco, the small 10 percent slice of non-rent-controlled units must absorb most of the upward pressure on rents being generated by the AI boom.
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slice → control → boom
That's already resulted in double-digit increases in median rents.
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That → result → rents
If Lurie's proposed reforms succeed in limiting evictions that bring units back onto the market, reducing rent increases at already rent-controlled properties, or creating new market-rate condominiums, an even smaller share of units will have to absorb the AI-fueled increase in demand.
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share → propose → demand
A more sustainable, long-term approach to housing affordability would be to eliminate regulatory barriers to new construction.
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approach → eliminate → construction
Rising rents should, ideally, be a signal to builders to construct more units in the city.
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rents → rise → city
Under Lurie, San Francisco has adopted a handful of pro-supply reforms.
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Francisco → adopt → reforms
It's cut the number of affordable units new housing developments must include.
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developments → cut → units
The city also passed a citywide upzoning initiative.
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city → pass → initiative
Even so, those deregulatory moves have done little to boost construction.
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moves → do → construction
The number of completed homes in the city is in the hundreds this year.
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number → complete → hundreds
Pro-supply housing activists have pressed Lurie to go further on supporting new home construction.
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activists → press → construction
…and 18 more, not listed.
The Aporia
