The Impact of Rent Control Expansion in San Francisco on Evictions and Wrongful Claims

A recent study published in the Journal of Housing Economics, “Rational eviction: How landlords use evictions in response to rent control” examines the impact of expanding rent control in San Francisco on eviction notices and complaints about wrongful evictions. Rent control policies aim to prevent rapid rent increases and maintain rents below market rates to keep renters more stably housed. As of 2022, several states and over 200 municipalities have adopted some form of rent regulation, while other localities have moved to repeal, weaken, or ban these policies. The study found a substantial increase in no-fault eviction notices and wrongful evictions in San Francisco following expansion of their rent control policy in 1994, especially in lower-income areas and during periods when rent control provisions were more binding. This suggests that rent control may be less effective at promoting housing stability when not paired with stronger tenant protections.  

Because rent control policies prevent landlords from raising rents for current tenants to market rates, they tend to reduce returns for landlords and create incentives for them to exit the rental market, reducing the total number of rental units available. To mitigate this exit incentive, some rent control policies incorporate “vacancy decontrol” provisions, allowing landlords to reset rents to market rates upon tenant turnover. However, this allows landlords to benefit financially from turnover and may incentivize them to encourage or force tenants to leave. In the context of 1990s San Francisco, the implementation of rent control and vacancy decontrol provisions were further complicated by policies that limit the legal reasons landlords could evict a tenant. In 1994, a ballot referendum removed exemptions from San Francisco’s existing rent control laws for small (fewer than 5 units), owner-occupied buildings built before 1980, increasing the share of rent-controlled units by roughly 68% per ZIP code on average. 

While prior research has explored how landlords respond to rent control measures by exiting the rental market, the study authors sought to understand how San Francisco landlords adjusted their behavior following the 1994 referendum without exiting the market. They hypothesized that evictions would rise in newly rent-controlled buildings, that there would be larger increases in evictions during periods of high market rent pressure, and more eviction activity in neighborhoods where tenant challenges are less likely. 

The authors used ZIP code-level data on eviction notices and wrongful eviction claims filed in the years before and after the 1994 rent control expansion from the San Francisco Rent Board. To identify where the policy change had the greatest effect, they relied on the 1999 San Francisco Assessor’s Secure Housing Roll, which includes information on unit location, size, and construction year. Buildings with fewer than five units built in 1979 or earlier were considered "newly rent controlled," aligning with the policy change that removed the rent control exemption for such buildings. To address the lag between the 1994 policy and 1999 data, the authors also used building permits and parcel split data. 

Descriptive analyses showed that ZIP codes with more newly rent-controlled units saw sharp increases in wrongful eviction claims beginning in 1996. By contrast, neighborhoods with fewer affected units showed no such trends. Evictions spiked during periods of high rent inflation (1995–2005), when market rents far exceeded allowable rent increases, creating stronger incentives for landlords to pursue tenant turnover. The authors note that evictions for reasons “landlords cannot directly control,” such as nuisance and non-payment of rent, remained relatively constant after 1994, while those for reasons such as owner move-in or breach of lease increased. 

The authors constructed a model to examine the differential impacts of rent control expansion on evictions and wrongful eviction claims across San Francisco ZIP codes. They found that for every additional 1000 newly rent-controlled apartments in a ZIP code, there were approximately 20.07 additional eviction notices filed annually. Wrongful eviction claims rose by 7.63 per 1,000 units, a 125% increase. This represents an 83% increase over the pre-referendum average eviction rate. Focusing specifically on newly rent-controlled units (those with two to four units built before 1980), the study finds 16.88 eviction notices per 1000 newly rent-controlled buildings, indicating that the effects are primarily driven by these properties. Effects were concentrated in low-income neighborhoods and were stronger during periods with larger differences between market rents and allowed increases under rent control. These patterns suggest that landlords were more likely to pursue evictions in areas where tenants had fewer resources to challenge them. 

The findings raise concerns about vacancy decontrol provisions in rent control policies can incentivize landlord behaviors that undermine the anti-displacement goals of rent control, resulting in increased housing instability for renters. To address these issues, the authors suggest policies such as tenant anti-harassment ordinances, expanded legal protections, and improved code enforcement. Ensuring access to legal counsel or enabling tenants’ attorneys to recover legal fees could provide additional protection, particularly for low-income renters facing eviction in an already constrained housing market. 

This article can be found at: https://bit.ly/3RsKRrg.