Extra Rent Control is Too Much

In 2019, Gov Newsom and California passed Statewide Rent Control. In November 2023, the Fairfax Town Council passed 2 additions to their ‘Rent Control’ ordinance 870. They are sections 5.54 ‘Just Cause’ and 5.55 ‘Rent Stabilization’.  These sections are what people are talking about.  They add a lot of regulations as to how landlords and tenants interact.  They give tenants added regulations dealing with evictions.  They were proposed by the Democratic Socialists of America (Marin Chapter) and are similar to rent control in Berkeley and SF. 

In summary, the major issues that most people have are that:

1. No Fairfax resident got to vote on these ordinances.   Only the Town Council voted. Because the ordinances are so major, we think that this is fundamentally undemocratic.

2. For ‘Rent Stabilization’ the max yearly rent increase is 60% of CPI or 5% which ever is lower.  Cal state law is max increase of 5% + CPI or 10% which ever is lower.

3. For ‘Just Cause’, there are complex and very generous rights granted to tenants and a complex process for getting rid of bad tenants.  This process and the process for mediation between renters and tenants will go through the Berkeley Rent Control Board with free advising for tenants by Legal Aid of Marin.

On the face of it, this is fine for tenants, but there are many unintended and expensive consequences for landlords, renters and homeowners.

1. Because these rules are complex, and the penalties for not getting everything correct from the landlords side of things can be severe and costly, many landlords are deciding not to rent out spaces.  They feel there is too much financial risk.  When the number of available rentals decrease and supply being constant, the starting rent for new rentals increases tremendously.  Therefore anyone wanting to move into the area, or change their current FF rental, will face much higher starting rent.

2. The max yearly raise is .6 of CPI.  Historically CPI is about 2%.  Therefore the max rent raise will be 1.2%.  On a $2000/mo place, that is $24/mo/ year.  This means that the landlord needs to raise the rent every year (most do not at the moment) also, this small increase, disincentivizes investment into new units or the upkeep of existing units.  

3. Existing tenants get a better and better deal the longer they live in the place,  so they have no incentive to move.  This creates higher prices for new renters and doesn’t allow new, younger renters and families to move in.  Those are often students or people working locally.  This leads to older renters paying under market rates and getting a sweet deal, and younger workers who are just starting out, paying the ‘rent control premium’ just to live here.

4. The landlords will not be able to sell their homes/units without up to a year notice to tenants (in some cases) and not be able to sell without offering to buyout the tenant to the tune of tens of thousands of dollars.  This is a tremendous liability.  In addition, if the tenant does not wish to leave, then the house must be sold with the tenant in place, which usually means the seller has to have a discount on the property (ie it’s less valuable).  Less desirable and less valuable houses bring down the price of ALL homes in the area, even those with out rental units.

These are some of the most terrible effects of the new ordinances.  There are many more.

As a general rule, Fairfax need more housing, not less affordable housing. Not having affordable housing will cost Fairfax in terms of taxes, transportation and city grants from the State, and other indirect costs.

Our goal is to make a democratic Fairfax more vibrant livable and affordable for everyone. Rent Control ordinances create the opposite – a town that only the wealthy can afford, that is less diverse and more homogenous.

If you would like to support the cause of providing information and action surrounding the issue of extra rent control, please contribute to the Marin Residents PAC.

Thank you.