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New proposal would put some new construction under rent control
Supervisors Aaron Peskin and Matt Dorsey are introducing legislation that would require certain new housing developments in San Francisco to include rent-controlled units. Their goal is to expand rent control restrictions to new housing developments that take part in San Francisco's local density bonus programs which allow developers to build taller and denser buildings beyond local zoning limits.
The original proposal
In May, Supervisor Peskin introduced his Rent Control Housing Ordinance of 2022, hoping to usher in a sweeping expansion of rent control in San Francisco. "It would be the largest expansion of rent control in this town since 1979," he proudly announced.
But what about the Costa-Hawkins Rental Housing Act, which prohibits cities from imposing rent control on apartments built after February 1995? Well, it turns out there are some exceptions. In ex- change for direct financial assistance or density exceptions and other zoning modifications, developers can agree to make some units rent-controlled.
Under Supervisor Peskin's original charter amendment, all apartments (other than affordable housing units) added through the re-zoning would be subject to rent control. Fortunately, it did not garner much support in City Hall and did not make it onto this November's ballot.
New Peskin/Dorsey proposal
If at first you don't succeed . . . This time around, the legislation, introduced by Supervisors Peskin and Matt Dorsey, is more targeted, applying rent control only to new units authorized through a "specific program."
"The ballot measure I was trying to do earlier this year would be more comprehensive ... but this [revised version] is part and parcel of what the ballot measure was trying to do," Supervisor Peskin said.
Supervisor Peskin's ambiguous statement raises the following questions:
1. What exactly is the "specific program?" It's not part of the HOME-SF program, that already exists.
2. Will the Peskin/Dorsey Proposal itself become the specific program?
3. How is it different from the earlier legislation?
4. Would it allow for buildings with a mixture of market rate, below market rate; and rent-controlled units? Or would developers, taking advantage of this new (yet-unnamed) program, have to make all the units rent-controlled units? If so, what financial incentive would developers have to build rental housing?
Regarding Peskin's original proposal, Corey Smith, executive director of the Housing Action Coalition, stated the building restrictions imposed by this legislation would make it "much harder, if not impossible, to build new housing" and questioned the proposal's legality, suggesting. Smith also felt that it might be in violation of Costa-Hawkins.
According to an old adage, "A bad idea (when perfectly executed) is still a bad idea." Likewise, a bad idea (when rewritten) is still a bad idea. Such is the case with the Peskin/Dorsey proposal.