Nick, Renter in San Francisco, CA

So obviously rent control is a good thing for us renters but is there any downside to living in a rent controlled apartment?

Asked by Nick, San Francisco, CA Mon Apr 2, 2012

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Nick- If you are new to San Francisco and trying to locate an apartment, you are actually being hurt because of rent control. Rent control is in part responsible for the lack a available units in San Francisco (it keeps them from turning over) and it keeps prices higher than they otherwise would be for those units that are available to rent. You will have to be in your rent controlled unit for a number of years for rent control to actually help you (meaning the future market price is significantly higher than what you originally payed). And the previous comments are absolutely true, you get what you pay for. If the property owner is subsidizing your rent (that's what rent control is), they're less likely to be making improvements to your unit as well.
1 vote Thank Flag Link Tue Apr 3, 2012
I guess getting an apartment might be challenging. A slightly below market rate apartment, can get 30 applicants. Surely rent control caused shortage is part of the reason for the low vacancy rate.
0 votes Thank Flag Link Tue Apr 3, 2012
Hi Nick

It will probably mean that only crucial repairs will get made. When you pay market rent, you'll have a landlord more likely to make improvements to the property and keep it in tip top fashion. With the severe limits in raising rents for landlords, means many landlords won't be able to keep up with repairs, or they will get a cheap contractor who may not do the job in a workmanlike manner.

I've seen many tenant occupied units and the ones that have been lived in the longest rarely are in great shape, even when the tenant has it neat and tidy.

Best Regards
Eric Castongia
Zephyr Real Estate
DRE No. 01188380
0 votes Thank Flag Link Mon Apr 2, 2012
They're always pros and cons about rent control. In fact, the Supreme Court may be reconsidering the entire notion sometime later this year. given the current courts makeup, that may mean drastic change.

But on a practical level, rent control often means that the landlord may not invest in their properties as much as you think they would. So, for example, if something breaks like an appliance for example, the landlord might give you a used one instead of a new one. Or they might not be as willing to invest in new windows, or other amenities such as in-unit laundry. It simply may not make economic sense to them. Because, from a rather cynical pov, it's not worth it to them. And, they would rather see you go and then upgrade the apartment and re-rent it out at the much higher market rate that you'll find today. This is not to say that landlords are excused from giving you substandard housing that violates city code. Not at all, but you might not be getting the highest quality that money can buy – more than you expect.

Of course, in the past – and in many cases today, buying was never a better alternative to renting in San Francisco. But with astronomically high rents noe common, the situation has changed. In some cases buying is indeed better than renting – especially when you're near the $5000 a month range for rent. I always ask my first time homebuyers this: what are the chances that you will get any money back from your landlord when you move out. I'm not talking about deposits, I'm talking about the rent. None, right? On the other hand, what's the likelihood that you'll get some or most of your mortgage payment back when you sell your next house? Some – Or at least you'll have a fighting chance. Therefore, if you're in a good situation under rent control stick to it. But, if you feel like you're missing out on modern amenities and other benefits of owning – such as the mortgage interest deduction – then you might reconsider the value of rent control.
0 votes Thank Flag Link Mon Apr 2, 2012
As the saying goes- you get what you pay for: you pay below market rent, you get below market upkeep.

Some people, in a below market apartment but who care how their place looks/functions, of course with the landlord's prior approval, do improvements themselves.

Astrid Lacitis
Keynote Properties
415 860 0765
0 votes Thank Flag Link Mon Apr 2, 2012
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