What's at stake?
Average rents in Fresno have skyrocketed during the pandemic. Some experts say capping rent increases can help stem displacement.
A Fresno mother of four, who fled from a domestic violence situation 10 years ago, is now worried she might have to uproot her family once more if her rent keeps rising.
Cindy Bargas relies on a Section 8 housing voucher to cover part of the rent on a two-bedroom apartment in southeast Fresno where she lives with her husband and four children, 5 to 15 years old. Now she fears that, even with the assistance, the latest rent increase – from $990 to $1,350 a month starting in May – will force them to double up with another family or move to a “dangerous” area.
“I’m here today, worried because the rent is rising too much,” Bargas said in Spanish during the March 10 City Council meeting. “I depend on Section 8, and I am very grateful to have that, but I’m worried my voucher will no longer be sufficient to afford where I live.”
Bargas is one of dozens of renters and housing advocates who have shown up week after week to put pressure on city officials to implement policies that were recommended by the Thrivance Group’s Here to Stay report, which addresses displacement in Fresno.
Of the 46 policy recommendations in the report, rent stabilization, or rent control, has emerged as a top 10 recommendation from the city’s Transforming Climate Communities’ anti-displacement task force and from renters who spoke during recent City Council meetings.
Among the five most populous cities in California, Fresno and San Diego are the only ones that have yet to implement a local form of rent control; smaller cities like Palm Springs and Hayward have also implemented protections to keep rent stabilized.
“We do need to start exploring rent caps in the city of Fresno and regulating the rate at which rent increases,” said Destiny Thomas, a former resident of Fresno and founder of the Thrivance Group, at a December 2021 Anti DIsplacement Task Force meeting.
David Garcia, housing policy researcher with the Terner Center, said rent control is often “contentious” between landlord and renter groups, but the issue is not black and white.
“We know that the truth is much more nuanced, and it’s too important of a policy to let it succumb to hyperbolic arguments on either side,” Garcia said.
“It’s just understanding what we know and admitting what we don’t know and trying to make the best decision for the people that need to stay housed.”
What is rent stabilization and rent control?
Rent stabilization is an umbrella term that could represent a range of policies that would regulate how market rate rents increase over time.
According to Thomas, rent stabilization could mean increasing the number of affordable units that developers are required to build with each housing project, limiting how landlords go about increasing rent or implementing policies to define what local real estate considers “market rate.” It could also mean a cap on rent increases – which takes on many different forms in and of itself.
In 2020, California implemented the Tenant Protection Act, a statewide rent control that caps rent increases at 5%, plus the local consumer price index, or 10%, whichever is lower. Local governments are at liberty to put tighter restrictions into place.
Local rent control policies only impact renters living in multifamily units that were built before 1995. The Costa Hawkins Act prevents any rent control ordinance from regulating rent of single-family homes, condos or any housing built after 1995. Additionally, rent for land at mobile home parks is also excluded from local rent control policies.
Rent control also only regulates the rent of renters who have lived in one place for multiple years; it does not impact the rent that a landlord can set when he puts a rental on the market. To make up for this, most forms of rent control contain “just cause” eviction protections, to prevent landlords from evicting current tenants so they can raise the rent for new tenants.
Cities can implement caps for rent-control-qualified units, but they can vary greatly, depending on the city, Garcia said.
“There’s no great rule of thumb on exactly what that percentage should be to achieve a good policy outcome,” Garcia said. “It’s just really political at that point with what city leaders decide that’s best for their market there based on what they are hearing from landlord groups and what they can negotiate with tenant groups.”
In cities like San Francisco and Oakland, rent control typically caps the rate of rent increases at around 2%, whereas other cities have caps around 5% or set them by inflation and allow for higher increases when large scale repairs need to be made to the building.
How does rent control impact housing?
Garcia said there are a lot of studies on extremely restrictive rent control policies which have shown to be harmful to the overall housing supply and there are studies showing that rent control does benefit renters who live in rent-controlled units, however there hasn’t been much analysis of how rent control in California, with the Costa Hawkins act, has affected the state’s inventory.
“The evidence on rent control is really nuanced and tricky,” he said.
The California Legislative Analyst’s Office in 2016 published a report that stated that one of the unintended consequences of rent control can be a lower quality of housing because landlords receive less money to invest into the property.
“Rent control is a counterproductive policy that has exacerbated our housing shortage,” according to a statement from the California Apartments Association to The Bee.
A 2019 Stanford study of San Francisco’s form of rent control, which limited rent increases to 2.3% in 2022, found that rent control lowered displacement among renters, however it also led landlords to convert their properties to owner-occupied units at a higher rate than landlords that were not restricted by rent control.
“(Rent control) does mean that people are less likely to be displaced and that’s no small thing,” said Amber Crowell, a policy researcher with Faith in the Valley and a member of the anti displacement task force. “Because when a family is displaced, the impact that it has on them financially, emotionally, socially, physically is catastrophic.”
The Urban Institute in 2020 released a report summarizing studies from the 1940s to present day, stating that the economic impacts of particularly stringent rent controls are detrimental to the overall housing market, but rent control can be very beneficial to renters.
The 2020 report also adds that given modern day guidelines, such as Costa Hawkins, the effect of rent control really depends on the local context in which it takes place.
What could a local rent control policy do in Fresno?
The city of Fresno has 86,193 registered rental units, a number many believe is an undercount as some units are not included in the Rental Housing Registry.
At least one-third of Fresno’s rental market would be excluded from a local rent control ordinance because there are 26,318 single family homes and condominiums in Fresno’s rental market, according to the registry. Additional rental units, built after 1995, would also be excluded.
“There is a whole class of tenants who live in newer buildings or structures who would not get the benefit of that rent control,” Garcia said. “So that is a gap in the policy.”
In 2018 and 2020, attempts to end Costa Hawkins and make more types of rentals eligible for rent control failed.
If a local rent cap policy were to be enacted in the city of Fresno, renters like Amanda Hyde, who lives in a single-family home, would still face unregulated rent increases.
Hyde, who lives in a two-bedroom house west of Fig Garden, said her rent has increased by 6% a month, from $1,600 to $1,700, in the year and a half she’s lived there. Prior to moving to Fresno, Hyde lived in West Hollywood where she formed the West Hollywood Renters Alliance.
Hyde owns her own business and said she is able to push herself “to make $100 more a month,” but not all renters are in her situation.
To make matters worse, Hyde and her fiance now have to find another rental or try to find a house they can afford to buy because her landlord decided to move into the property and take the home off the rental market.
“Now I’m going to have to find myself another rental and pay $1,000 more a month for the quality of house I’m in,” Hyde said. “It’s not a renter friendly market.”
Thousands of renters in Fresno would however be protected if a local rent control policy were to pass. Because of these loopholes in the policy, housing advocates have stressed that rental policies need to be implemented in tandem with one another.
“It is not simply passing rent control; it is not simply building new homes,” Garcia said. “It’s a series of things that every community needs to consider if they are serious about reining in costs and keeping people housed.”