By Teliha Draheim
At the March 12, 2024 meeting of the San Anselmo Town Council, the topic of rent control was once again on the agenda, with a deciding vote about whether to proceed with crafting an ordinance or to have the outcome decided by a public vote in November. Mayor Burke’s viewpoints on this hotly debated item are represented here.
As a home owner with an additional rental unit, Mayor Burke approached the issue from a policy standpoint. “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. We have never said to grocery store owners that they have to sell cheaper food to a segment of the population, or tell car salesmen they have to sell their cars cheaper to these people over here because they are having a hard time. We don’t regulate private business in this way.
The way we address inequities in our society is we collect taxes collectively and we support the most vulnerable with public housing and general assistance. We take care of those falling through the safety net. We, all together, support those vulnerable people. We don’t carve out and say, you landlords are going to be the ones that are going to support the vulnerable people.”
San Anselmo is one of the most desirable locations to live in the entire country. There is more demand than supply and not everyone can afford to live here, she noted. If the goal of rent control is to increase housing stock, this fallacy has been widely debunked by economists. Rent control does not increase supply. In fact, it deters developers from building and causes housing units to be removed from the market.
This artificial control of rentals has the potential to negatively affect the San Anselmo Housing Element by reducing the number of housing units available at the local level. Mayor Burke points out that rent control benefits current tenants, unrelated to how much money they make, at the expense of private owners, who may rely on rental income for survival. “There is not an income test. You could make $1 million and still live in a rent-controlled apartment under the proposed ordinance.”
The DSA or Democratic Socialists of America, the national organization driving the push for extra rent control in Marin County, make the argument that tenants are providing equity to a landlord. “Equity that someone has in a property is not really relevant to what rent should be set at,” states Mayor Burke. “Equity is not cash. It is the promise of potential future benefit and not one that is guaranteed. Maybe your property will appreciate, but that’s if you sell, and your income stream is then gone.
The equity an owner receives is the benefit for their having saved and earned to buy that property. I saved for 15 years to buy my property and no tenant is entitled to my equity. Nor are they entitled to offset their rent because I may have equity. When you rent a car at Hertz you don’t own part of Hertz. They don’t owe you a cheaper price for it.
What the equity arguments are saying is, ‘You have more money than me and I am entitled to some of it.’ That’s just not the way it works. What I think this argument is about is the redistribution of wealth at the local level.
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.’
I don’t agree with that and I don’t agree that it’s the job of our council to take on the job of the federal or state government through taxation and make a certain group, landlords, subsidize people that makes less. I think 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.”
Mayor Burke discussed the relevance of rent control decisions in other jurisdictions in Marin County. She pointed out that Larkspur citizens voted to pass a rent control ordinance which cannot exceed 5% plus the Consumer Price Index (CPI) or 7%, whichever is lower. This is less than state rent control which is capped at 10%. She believes it passed because Larkspur arrived at a “sweet spot” which voters could agree on.
She contrasted this with the ordinance passed by the Fairfax Town Council with rent stabilization capped at 60% of the CPI or 5%, whichever is less. When a citizen backed initiative placed this on the November 2024 ballot, the Town Council tried to alleviate the situation by reducing annual rent stabilization to 75% of the CPI in 2024. However, in November, any change to state law regarding rent stabilization will be eliminated if voters decide they don’t want it.
Mayor Burke feels that the Larkspur vote is a strong indicator. “That narrowly passed, and I believe it is an indicator of the overall appetite for any level of extra rent control in Marin. Just my own prediction, but I believe Fairfax voters will reject the Fairfax Town Council’s rent control and just cause eviction ordinance as going way too far beyond state rent control.
Addressing the four other members of the San Anselmo Council, mayor Burke noted, “I think the fact that citizens had to put both of these ordinances on the ballot (in Fairfax and Larkspur) is an example of ineffective governance by the councils. I don’t want us to make that same mistake. I think the reason those initiatives popped up is that they didn’t listen to their citizens who said, ‘put this on the ballot if you’re going to do anything’, so I hope the five of us are listening.”
The proposed San Anselmo rent control ordinance, currently set at 60% of the CPI, “is a taking that allows no profit to a landlord” states Burke. “You can basically try to tread water but you can’t make any money. Anything we craft should be something we think our citizens will support so that when we put it on the ballot, they will say ‘yes’ like they did in Larkspur.”
Mayor Burke expressed the opinion that the topic was divisive as it impacts property rights and people’s income. It’s the kind of issue the citizens of San Anselmo should decide and not the Town Council of five.
Of the three council members who resisted putting the vote on the November ballot she asked, “What would be the fear? I don’t buy the argument that it’s going to be big money that will change people’s opinions. Our residents are smart and this issue has been fully vetted. Here in San Anselmo, we know what we want and we go to the ballot and vote for what we want. I think the three people here who are willing to pass this, know it would lose if it were on the ballot. I think they’re making an empty political statement that is out of touch with our residents and that will be overturned. I don’t know why they are willing to do this. I think that is bad governance.”
Mayor Burke also expressed the opinion that any rent control should not carve out exemptions for small units. She thinks the council members opposed to putting it on the ballot believe that if they limit rent control to landlords with more than four or five units, the smaller landlords will be appeased and less likely to raise the ballot initiative.
The thinking is, “We’ll just be going after those big bad corporate landlords, but I don’t think there’s a difference. I think this initiative will spring up within a week because ‘Mom and Pop’ landlords know they’re coming for them next. That couldn’t be clearer. I think that small landlords will raise the initiative because they are principled about it.”
Bottom line, “I feel that wealth distribution via forced rent control on private property owners is just wrong. I don’t think that’s how our society solves these problems. I’m all for some regulation of rental housing, but forcing annual losses on one category of business—landlords, is not how we solve our affordability crisis.”
San Anselmo Town Council members Alexis Fineman, Steve Burdo and Tarrell Kullaway voted to proceed with crafting the rent control ordinance and voted against placing the ordinance before voters in November. Council member Brian Colbert and Mayor Eileen Burke voted against the ordinance and opted to place the decision on the November 2024 ballot.
Update from Mayor Burke: “It is my understanding that there are more than enough San Anselmo voters who will sign either a referendum or initiative so the issue is placed on the ballot and they have their say on San Anselmo’s rent control ordinance and that signature gathering begins April 10, 2024. I’m not sure if that will take the shape of a referendum or initiative, but I do expect the issue to be before voters in November. In November I expect voters in San Anselmo will say NO to their extra rent control ordinances that limit annual rent increases to only 60% of inflation and that don’t allow landlords to make a living.”
Claire Grace Armitage says
Thank you, Ms. Draheim, for this excellent article. It brings the voice of reason into what has become an ideological issue.
In this coming year, many housing providers will see their homeowner’s insurance policies either canceled and replaced with California Fair Plan insurance, a far more expensive and less comprehensive insurance; or, if they are lucky, will receive notices of the first of many increases of at least 20%. Many property owners saw their water bills double last summer, and PG&E’s rates have also skyrocketed. The 60 or 75% of CPI increases currently allowed or proposed in San Anselmo or Fairfax will often not even cover the increases in these essential costs, much less the ongoing repairs and maintenance that housing providers incur.
This slippery slope leads to the degradation of housing stock in rent-controlled areas, affecting not only the values of rental properties but also the single-family homes in the neighborhood. Renters who were lucky enough to have housing providers who would pay the extra dollar for the best quality may be surprised to see aesthetics fall to the wayside as housing providers come to grips with the realities of rent control in Marin County.
Linda Pfeifer says
In the last two years we have seen some of the highest inflation in 30 years. It is unreasonable and unsustainable to force rent control measures that artificially saddle landlords (whom I call “housing providers”) with the inability to keep up with inflation.
As maintanance costs, labor costs, and materials costs rise, more and more housing providers will just opt out of the market because rent control does not “pencil-out” to keep above water.
These strapped housing providers will sell (e.g., many corporations are now buying up affordable rental properties), or they will fall behind on important maintenance (it costs thousands to maintain a unit), or they will simply remove their units from the market. This is not a prediction; it is a fact. It has already happened in both San Francisco and New York, where housing problems have only worsened after decades of rent control.
Our government receives billions in taxes each year, in part to help the housing problems. Yet where are the increased govt. housing subsidies? Where is the increased public housing? Where are our tax dollars going? Increased rent control on private homes will only make the rental problem worse. Government accountability re: spending priorities, such as housing and infrastructure, is the bigger question.
valeri says
DearTeliha – excellent review of a bad situation for homeowners. HIgh taxes- and now more government overreach.
Kathy Flores says
Mayor Eileen Burke is a breath of fresh air! She speaks and votes on what she believes. She has excellent examples on rent control; how you live where you can afford and not expect landlords to lower rents or not being able to raise rents to cover the cost of maintaining the property, paying higher property taxes, increased insurance, etc. Many of us ‘elders’ have a rental so that we can retire and open up jobs for others to fill.
Life is Not Fair – Anyone every tell that to you? Work hard and save. That’s what most of us have done to get where we are today. It may not be exactly where you envisioned yourself but you did it all on your own and not asking for someone to pay your way.
Mayor Eileen Burke is smart, caring, fair and has a good head on her shoulders. I could only dream that other Town Council members follow in her foot steps!
Dan Teree says
Eileen Burke is a leader. It’s a tough job, but she is preventing class warfare and the reduction of rental housing stock. If rent control comes, the number of rental units will gradually decline (taken out of stock). Its an economic fact.
Michael Sexton says
Mayor Burke is the best example of competent local leadership. Her perspective on extra rent control is well-reasoned, insightful and bold. He has consistently put the greater needs of her community in the forefront without regard to political convenience. Her leadership opposing the fallacy of extra rent control is well regarded by the thoughtful citizens of San Anselmo, and will be looked at in the future as a sane step on the path to greater housing affordability. Marin is an expensive place to live, and her efforts will help reduce the cost of initial rents for new renters, and help keep vulnerable seniors who depend on rental income, to stay in their homes.
She is an example of the best of local government.
Diana Knight says
Mayor Burke needs to be cloned and installed in every town in Marin County