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Kirk Draheim
Rent Control--A Forced Redistribution of Wealth?
Marin County has become the center of a heated debate over rental housing policy. Spearheading the effort for stronger rent control and just-cause-for-eviction regulations is the Marin chapter of a national organization—the Democratic Socialists of America (DSA).
In 2022 the DSA, sensing Fairfax was low-hanging fruit, mobilized their out-of-town membership to attend Fairfax Town Council meetings and persuaded the Council to adopt rent stabilization and just-cause-for-eviction ordinances. These new regulations, designed for large cities, were written by Leah Simon-Weisberg, an attorney from the Berkeley Rent Control Board. They go far beyond the laws established by California’s Tenant Protection Act of 2019, making Fairfax's regulations among the most stringent in the state.
In a room packed with DSA activists, these ordinances were rammed through, without adequate outreach or input from some of the most significant stakeholders—home owners and local, independent housing providers.
The passing of the ordinances sparked a swift and significant public backlash. Fairfax citizens quickly organized, collecting over 1100 signatures to place a citizen's ballot initiative, Measure I, on the November 2024 ballot, allowing voters to decide the fate of these controversial policies.
In Fairfax, the excessive new laws have had a clear and predictable impact: 30% of the “mom and pop” housing providers surveyed, those homeowners who provide 2/3 of all rentals in Fairfax (about 1000 units), have either pulled their units from the rental market or plan to.
Homeowners will not continue to offer rental housing if it is not financially feasible for them, or risk losing control of their property to a bad tenant who has their own interests and profiteering in mind. These new laws have also disincentivized the building of additional rental units, further decreasing our future housing supply.
DSA Expansion of Influence into San Anselmo and Larkspur
On the video of the Town Council meeting on Nov. 2, 2022 (at the 2 hours, 18 minutes mark), Curt Reis introduces himself as “a co-chair of the Marin Chapter of the Democratic Socialists of America and a co-chair of our campaign to establish rent control in Marin, starting right here in Fairfax. We’ve been hard at it for over a year.”
Flush with their success in Fairfax, the DSA moved on to San Anselmo and Larkspur. As a direct result, San Anselmo also adopted more stringent rent control laws, now being challenged by two citizen ballot initiatives on the November 2024 ballot. Measure N will enact the rent-control ordinance approved by the Town Council in April by a 3-2 vote. Measure O imposes even stricter just-cause-for-eviction ordinances which will likely, as in Fairfax, serve to reduce available rentals.
In Larkspur, voters elected to adopt new renter protections by a narrow margin last March. Not satisfied with their victory in that election, the DSA and other tenant groups are backing an even more restrictive initiative, Measure K, on the November 2024 ballot.
A Forced Redistribution of Wealth
The DSA 2021 convention on housing states:
"We seek to counter the dangers [of the housing crisis] by building on the insurgent tenant movement, and further de-commodifying housing and land. This can be done through canceling rent, closing eviction courts, and, as landlords exit the market, using state action to acquire private property and transform into public democratically controlled housing."
https://www.dsausa.org/dsa-political-platform-from-2021-convention/#housing
At the core of the rent control debate is the forced redistribution of wealth, starting at the local level. Among the most vocal critics of the new rent control laws is Mayor Eileen Burke of San Anselmo, who owns a small rental unit on her San Anselmo property. Mayor Burke has publicly voiced her concerns about the fairness and effectiveness of these new regulations.
"I believe that we, as a society, have never required a specific segment of our community—private business owners—to shoulder providing benefits to others," Mayor Burke argues. "We have never said to grocery store owners that they have to sell cheaper food to a segment of the population, or told car salesmen they have to sell their cars cheaper …. When you rent a car at Hertz, you don’t own part of Hertz. We don’t regulate private business in this way."
Mayor Burke believes that forced rent control does not address the underlying issues of housing affordability; numerous economists who study rent control agree. Permissible rental increases are now set by town councils, who have become the arbiters of determining what a fair rate of return should be. Permissible rental increases, currently set at a fraction of the Consumer Price Index (CPI), do not allow property owners to address the rising costs of maintenance, insurance, and property taxes. As a result, homeowners who continue to rent out units will be forced to defer maintenance, leading to a decline in property conditions and overall neighborhood quality.
It has never been the responsibility of individual homeowners to pay for the costs of building their neighbor’s home or to share the equity they have built in their properties with tenants to whom they rent. A forced redistribution of wealth is not only unjust and impractical, but challenges the democracy and economic freedom upon which our country has been built.
The Equity Argument
The DSA argues that tenants are contributing to the equity of property owners simply by paying rent. However, many others, including Mayor Burke, challenge this notion.
"Equity that someone has in a property is not really relevant to what rent should be set at. Equity is not cash. It is the promise of potential future benefit and not one that is guaranteed."
The DSA’s position is that housing providers have more money and tenants are entitled to some of it.
“That’s just not the way it works," states Mayor Burke. "Instead of saying our federal government should increase taxes and support housing, or our state governments should build more public housing, they’re saying, ‘Landlords, we think you make too much money and we tenants deserve some of it.’"
Burke emphasizes that the role of local government should not be to impose policies that mimic federal or state-level taxation strategies. Rather, she suggests,
"The way you solve a lack of affordable housing is to subsidize housing. As a council or county or state, you build or buy housing, or provide housing vouchers, which I support."
What We Can Do - Repeal the Bad Laws
These unfair housing laws need to be repealed in favor of more balanced regulations which support both tenants and housing providers. These new ordinances have produced the unintended consequence of reducing available housing, driving down property values, and increasing administrative costs, further reducing funding for essential community services.
In Fairfax, four town council candidates opposing the three incumbents running for office, all support Measure I—another clear indication that the 2022 laws are not fairly balanced.
On Nov. 5, voters in three municipalities — San Anselmo, Fairfax and Larkspur — will decide whether to repeal new rent-control ordinances adopted by their Town Councils or make them stronger. The outcome will likely have significant implications for housing policy throughout Marin County and potentially beyond.
A “YES” vote on Fairfax Measure I, will repeal the rent control and just-cause-for-eviction ordinances that the Town Council approved in 2022.
A “NO” vote on San Anselmo’s Measure N and Measure O, will repeal the rent control and just-cause-for-eviction ordinances.
A “NO” vote on Larkspur’s Measure K will keep existing rental protections in place and not make them stricter.