A sharply divided Richmond City Council Tuesday approved a rent control ordinance that restricts how much landlords can charge on 9,900 out of nearly 34,000 rental units in the city.
Effective Dec. 1, rent increases for rent-controlled units will be capped annually based upon the Consumer Price Index. This means if CPI increases by 2-percent in the last year, a landlord can raise a $1,000 rental rate in the following year by a maximum of $20.
Also effective Dec. 1, a just cause eviction ordinance will take effect, City Manager Manager Bill Lindsay said, replacing the current system where landlords only need to give notice, not a reason, for eviction.
Properties built after 1995, single-family homes and condominiums are among those exempted from the rent control policy.
Passage of the policies followed more than five hours of impassioned debate during which more than 100 people spoke in support and against the ordinance. Some fear that landlords — who will be forced to shoulder between $1.6 million and $2.2 million in costs to implement the policy — will move to significantly spike rents or evict tenants before the policies take effect Dec. 1.
A renter slapped with an “unallowable” rent increase during that time would presumably be able to take his or her case to a five-member rent board that will be appointed to monitor the rent control policy and moderate tenant-landlord disputes, according to city leaders, though not all the details of the policy have been hashed out.
Council voted 4-3 to enact the most rigorous of two options aimed to protect renters, despite warnings from economists and Realtors that rent control does not increase affordability and creates a costly government bureaucracy.
The policy was enacted against the recommendations by Richmond City Manager Bill Lindsay, who proposed hiring a third party to conduct a study on the potential impacts of rent control on the city. Without such a study, Lindsay said the council should have adopted a less rigorous, incremental approach and assess its effectiveness over time.
Councilmembers Gayle Mclaughlin, Eduardo Martinez and Jovanka Beckles — members of the Richmond Progressive Alliance — voted in favor. Vice Mayor Jael Myrick, who earlier indicated he would not support the policy, abruptly changed his vote after the RPA coalition on council agreed to some modifications.
A frustrated Mayor Tom Butt and Vinay Pimple, who opposed the policy, stormed out of the emotionally charged meeting just as others on council cast the deciding votes.
The roughly millions in annual costs to implement rent control includes hiring up to 11 staffers to enforce the policy, along with forming a rent board. The rent board will have the power to set allowable annual rent increases and act upon grievances posed by renters and landlords.
Supporters of the policy, including tenant advocates, cited studies showing rent increases of about 24 percent over the last four years in Richmond. They claimed low-income families are being priced out of Richmond, particularly as a result of the Bay Area technology boom. Without rent control, supporters say, gentrification would accelerate.
Landlords and most economists oppose rent control, saying the well-intentioned policy has proven to be ineffective at keeping rents affordable in other cities. In San Francisco, Berkeley and Oakland, for instance, rent control has done little to curb skyrocketing rents. Pimple presented data Tuesday showing that Oakland renters have seen increases of 240 percent over 17 years. During that same period, Richmond rents — without rent control — have gone up 60 percent, Pimple said.
“I did ask the rent control groups to give me any evidence they had that rents in rent controlled cities was cheaper and they didn’t come up with anything,” Pimple said. “I really think we shouldn’t make a call on this before the staff comes back with fully developed evidence.”
Opponents also cite evidence that rent control discourages property owners from making building improvements. And with rent control, they add, there’s less turnover as renters hold onto to rent-controlled properties, freezing other low-income families out of the market.