San Francisco Approves Scaled-Back Rent Control Measure

The San Francisco Board of Supervisors has voted to expand rent control to an additional 16,000 apartments, with one large caveat – the measure will not go into effect if voters reject Proposition 33.

Prop. 33 is a statewide referendum that proposes to repeal the Costa-Hawkins Rental Housing Act, a 1995 state law that prohibits cities from establishing rent control over all single-family homes and condos, as well as apartments built after 1995.

A bill introduced by supervisor Aaron Peskin was approved last week that would move the city’s rent control cutoff date to 1994 from 1979, contingent upon voters approving Prop. 33.

The Costa-Hawkins law prohibits local governments from amending rent control ordinances on units constructed after February 1995 or back-dated to when the locality passed its ordinance—which in San Francisco was enacted in 1979.

Prop. 33 doesn’t require local governments to enact rent control but would give them the option to do so. It also would allow cities to implement “vacancy control” over units when tenants vacate rent-controlled units; the Costa-Hawkins law permits landlords to establish initial rental rates for new tenants.

Peskin originally proposed to expand rent control in San Francisco to all buildings built through November of this year, but he scaled back the scope of the bill shortly before the board voted after pushback from pro-housing advocates, labor groups and developers, the San Francisco Standard reported.

The bill that was approved would expand rent control to an additional 16,000 units in the city, the report said.

A coalition of pro-housing advocates argued in a letter to the board that Peskin’s original bill would deny builders of recently constructed housing in the city the ability to recover construction costs and jeopardize their ability to repay their loans.

Peskin urged the board to commit to expanding rent control by voting to approve his bill before the election. When he amended it to move the proposed cutoff date from 2024 to 1994, Peskin waived the standard 30-day notice period so the ordinance could get a vote from the board this month.

“Like it or not, rent control is on the ballot, and this is a chance for us, who say we are advocates for renters, to commit to expand protections,” he said.

The tenant rights group, Housing is a Human Right and its parent organization, the AIDS Healthcare Foundation (AHF), collected more than 800,000 signatures last year to put Prop. 33 on the November 2024 ballot. AHF, a Los Angeles-based nonprofit that provides low-cost prescriptions, also owns and operates affordable housing in L.A.

Prop. 33, which proponents are calling the Justice for Renters Act, consists of 23 words: “The state may not limit the right of any city, county, or city and county to maintain, enact or expand residential rent control.”

Two other ballot initiatives to lift statewide rent control restrictions, also backed by AHF, were defeated by large margins in 2018 and 2020. Proponents of Prop. 33 have been outgunned by real estate interests opposing the measure in ad campaigns thus far by a three-to-one margin, the San Francisco Chronicle reported.

The No on 33 campaign has raised a total of $120M to fund ads across television channels and podcasts, including $83M from the California Apartment Association and $19M from the California Association of Realtors. The Yes on 33 campaign has raised $43M thus far, the report said.