In a scene that hasn’t been seen in California in almost 30 years but was perhaps more reminiscent of the late ‘60s, the Richmond City Council passed a rent control ordinance (pdf), limiting annual hikes to what currently amounts to 2%.

Richmond joins 15 other cities (seven in the Bay Area) that already control rents in the state, according to California’s Department of Consumer Affairs. Rents are exploding in the Bay Area, driven by tech money in the Silicon Valley, and the city feared it would spill into their lower-income neighborhoods.

“This is about stability to allow people to stay in their homes and stability for our neighborhoods,” Councilwoman Gayle McLaughlin told the Contra Costa Times. “We're a mixed-income community, and we want all of our neighborhoods to be stable. Our low-income residents are as important as every other resident, and we don't want them to be without a home.”

According to U.S. Census Bureau, 54.9% of Richmond renter households pay at least 30% of their income for rent, a figure the U.S. Department of Housing and Urban Development (HUD) considers unaffordable. Approximately 81.1% of Richmond low-income renters are paying more than 30%.

A survey by the city of six rental properties, each with 50 or more units, found that the average asking rental price rose 24.3% between 2011 and 2014.    

The law takes effect September 4, but will use rents as of July 21 as a baseline, to prevent landlords from trying to game the ordinance. Rent increases will be tied to the Consumer Price Index for the San Francisco-Oakland-San Jose area. Tenants will pay 40% of city fees assessed to run the program, estimated at between $170 and $230 a year. 

Around 10,000 rental units in the city will be affected. Single-family homes, condominiums and housing built after February 1, 1995, will not. The ordinance establishes a five-member Rent Control Board, and lets landlords appeal to it if they think they deserve a bigger hike.

The ordinance is constrained by state law that limits rent control to older, multi-unit apartment buildings. The 1995 Costa-Hawkins Rental Housing Act ended rent control in the state on vacant units, single-family homes, condominiums and new construction of any kind after the law took effect.

San Francisco, San Jose, Oakland and Berkeley are among the Bay Area cities that still maintain some type of limits. Despite those modest controls, rents have risen 44% in the area since 2010.

–Ken Broder

To Learn More:

Richmond: Rent Control Ordinance Finalized (by Karina Ioffee, Contra Costa Times)

Richmond Adopts Rent-Control Ordinance (by Hamed Aleaziz, San Francisco Chronicle)

Soaring Bay Area Rents Spark Growing Calls for Rent Control (by Matthew Artz, Oakland Tribune)

Another East Bay City Now Has Rent Control (by Jahna Barry, San Francisco Business Times)

Rent Control Ordinance (City of Richmond) (pdf)