Rent Control is Finally Coming to Sacramento

Rent Control is Finally Coming to Sacramento

Attorney · Sacramento, CA · Member since 2014 · 300 posts · 172 votes

On Tuesday, August 13, the Sacramento City Council will likely vote to enact a rent control ordinance. 

Here are the highlights:

  • - Landlords will be prohibited from raising rent more than 6% plus the “consumer price index” percentage for the West Region per year. For this June, that CPI percentage would be 2.7%. So in this hypothetical the total allowable increase would be 8.7%.
  • - Landlords will never be able to increase rent more than 10%.
  • - Landlords will be prohibited from evicting tenants unless 1.) tenants stop paying rent, 2.) are criminally charged, 3.) are illegally selling drugs, 4.) fail to give landlords access to the unit, or 4.) otherwise violate their lease.
  • - Landlords will be able to evict tenants if they are making certain repairs or selling the unit and provide the tenants an extensive 120-day notice.
  • - The ordinance will not apply to single family homes unless they have been converted into a duplex.

      In my opinion, this ordinance seems totally reasonable. The 6% increases are fine. The only sticky point will be the fact that landlords will no longer be able to evict tenants for whatever reason. 

      What are your thoughts?

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      Russell BrazilBusiness Member
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      Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
      7y

      Rent control is never, ever, ever, ever reasonable.  Rent control hurts everyone. It hurts property owners, it hurts tenants.  Rent control creates housing shortages. Rent control drives up the cost of non rent controlled units. Rent control creates animosity between tenants and owners. Rent control causes properties to fall into disrepair. 

      In the words of Assar Lindebeck, "Rent control  is the best way to destroy a city other than bombing it."

      See this reply in the discussion

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      • Investor · San Francisco, CA · Member since 2016 · 338 posts · 444 votes
        7y

        @Anthony Gayden, I totally agree with your reasoning on why rent control is twisted policy. 

        @Joe Scaparra, Up until now, we've also mostly had it the same way where you don't have to give a reason to evict. It's just that certain cities like San Francisco get all the attention for their rent control laws. Of course that will change once AB 1482 passes. 

        I do want to add to all this, though, that just because there's rent control doesn't mean you can't make money here. One key take away is that rent control creates winners and loser through policy. That's true about renters, but it's also true about investors. You just have to adjust to the rules of the game, and it creates advantages for certain people who have more knowledge about the rules and where the inefficiencies are. 

        In my opinion, rent control is bad for society. However, it's only bad for certain renters and certain investors, just like it's actually very good for certain other renters and certain other investors. I find it's a distinction that gets lost on a lot of folks from out of state looking in.

      • Rental Property Investor · Copperas Cove, TX · Member since 2016 · 38 posts · 23 votes
        7y

        @Embert Madison jr. it all sounds good to me, much inline with the practices I use to rent my properties, but I don’ t need the government getting into my business anymore than it already is.They pass a simple law that everyone thinks is reasonable and a few years later they amend the law and a few years later the amend it again, maybe add a few more restrictions and maybe taxes etc. ect. ect. Next thing you know they are forcing sec.8’s on you and telling you how much profit you are allowed to make. I can think of only a few things that the government can run better than the private sector, probably the military for one. Rent control is very popular in some areas but when it comes to my market I will probably quietly sell my rentals and move on.

      • Professional · Parsippany, NJ · Member since 2013 · 384 posts · 262 votes
        7y

        Ahh the liberals strike again

      • Rental Property Investor · San Ramon, CA · Member since 2017 · 350 posts · 611 votes
        7y

        Here's a recent article of SF vs Seattle, not about rent control, but about the supply side and how Seattle was able to tackle the housing issue.

        https://www-sfchronicle-com.cdn.ampproject.org/c/s/www.sfchronicle.com/bayarea/heatherknight/amp/They-re-getting-it-done-What-SF-can-14308325.php

      • Rental Property Investor · San Diego, CA · Member since 2017 · 439 posts · 578 votes
        7y

        Let the market dictate. Plain and simple.

      • Rental Property Investor · Elk Grove, CA (Elk Grove) · Member since 2019 · 30 posts · 3 votes
        7y

        @Embert Madison jr

        Is this all of Sac County? What about the City of Elk Grove? Is eviction allowed if the tenant is found to be running a child care business out of the house without previous notification or permission?

      • Specialist · San Francisco Bay Area · Member since 2018 · 221 posts · 160 votes
        7y
        Originally posted by @Jason Avila:

        @Embert Madison jr

        Is this all of Sac County? What about the City of Elk Grove? Is eviction allowed if the tenant is found to be running a child care business out of the house without previous notification or permission?

        Just the City of Sacramento.  As with most rent control policies, if a tenant breaks the conditions of the lease then eviction is warranted.

      • Rental Property Investor · Elk Grove, CA (Elk Grove) · Member since 2019 · 30 posts · 3 votes
        7y

        @Matt Ward

        I appreciate the response.

      • Attorney · Sacramento, CA · Member since 2014 · 300 posts · 172 votes
        7y

        @Jason Avila Just the City of Sacramento. I don't think any of the adjacent cities have rent control on their radar right now.

      • Rental Property Investor · Sacramento, CA · Member since 2019 · 9 posts · 0 votes
        7y

        I think it is best for a renter and owner to come together and make an agreement. If they can’t agree then they can go to the market and find someone they can agree with. That’s the beauty have an open market…Competition works both ways.  Of course, there would be more competition with less regulation on building and development. I think Rancho Cordova, Citrus Heights, Carmichael, and surrounding communities may see some positive outcomes. 

        It will be interesting to revisit this post in coming years and read some of these comments with the understanding of how the market reacted.

        Mark Johnson

        “If you can't fly then run, if you can't run then walk, if you can't walk then crawl, but whatever you do you have to keep moving forward.” Dr. Martin Luther King Jr.

      • Real Estate Agent · Sacramento, CA · Member since 2019 · 2 posts · 6 votes
        6y

        Does adding utilities or pet rent count as increasing the rent?  I just bought a duplex and we are working on getting rents to market value. 

      • Real Estate Broker · IL · Member since 2016 · 284 posts · 178 votes
        6y

        This will end up happening in Illinois before too long....not good.

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