For better or for worse, San Francisco is a city under rent control—but even rent control has gotten more expensive for renters over this past decade.
Owners of rent-controlled apartments (which the San Francisco Planning Department estimates means well over 60 percent of SF rental properties) are allowed to raise rents every year, but only by a small percentage regulated by the SF Rent Board.
The city recently announced the latest allowable price hike: Starting in March of 2020, rents can go up 1.8 percent across the city.
“This amount is based on 60 percent of the increase in the Consumer Price Index (CPI) for All Urban Consumers in the San Francisco-Oakland-San Jose region for the 12-month period ending October 31,” according to the annual notice.
This formula means that the annual increase has varied wildly over the past four decades, from as high as seven percent in 1983 to just 0.1 percent in some recent years.
Here are the allowable increases for every previous year since 2010:
- 2019: 2.6 percent
- 2018: 1.6
- 2017: 2.2
- 2016: 1.6
- 2015: 1.9
- 2014: 1.0
- 2013: 1.9
- 2012: 1.9
- 2011: 0.5
- 2010: 0.1
So, if an SF renter was paying $1,058 per month at the end of 2009—the median rent citywide at the time, according to the U.S. Census—and the rent increased up to the cap every year, it will hit around $1,253 by March 2020.
While that climb of a bit less than $20, every year can be significant to some renters on a fixed income, median rents citywide shot up more than $800 during the same period.
So the rent control rules are working as intended by keeping housing costs down—at least for those households that happen to have a rent-controlled home for an entire decade.
In the successful campaign to torpedo California’s Proposition 10, which would have expanded rent control across the state in 2018, opponents argued that while rent control drives prices down for some people, it has the inverse effect on other housing, an argument that will no doubt repeat in the 2020 election cycle.
A 2017 Stanford paper by economists Rebecca Diamond and Tim McQuade estimated that rent control policies drove up median rents citywide roughly six percent since 1994.
However, they also concluded that rent control is the only reason many renters can stay in SF these days at all, as “absent rent control essentially all of those incentivized to stay in their apartments would have otherwise moved out of San Francisco.”
In the 2000-2009 decade, annual rent increases ranged from as low as 0.6 percent to as high as 2.9.
Landlords of vacant apartments can set new rent at whatever amount they desire. In October, Gov. Gavin Newsom signed a new law capping rent increase statewide at five percent plus inflation, but that law doesn’t override SF’s more aggressive price controls.