San Francisco could end up with vacancy rent control—not despite of the state Costa Bill, but rather because of the Costa Bill.
    In 1995, the state legislature passed the so-called Costa Bill, a landlord backed measure to restrict local rent control laws. In particular, Costa sought to prohibit "vacancy rent control," where rents are controlled on vacant units, as well as on occupied units. The common perception is that Costa outlawed vacancy control but, in fact, Costa set forth parameters defining when vacancy control can apply and when it can not apply.
    Thus while Costa disallows blanket vacancy control, cities are specifically allowed to adopt limited forms of vacancy control.
    This is an important issue as San Francisco is poised to bring our rent control law "in compliance" with the state Costa Bill and bringing rent control into compliance can be done negatively or positively,
     Looking at Costa compliance negatively means that the city amend the rent control law to deal with everything Costa now says you can't do. Looking at it positively, though, means the city amends the rent control to do everything Costa says you can do.
     And vacancy rent control is one thing Costa says you can do.
     Costa specifically says vacancy rent control can be adopted to cover rental units which are vacated pursuant to a 30 day eviction notice—or about 90% of all involuntary vacancies in San Francisco. Costa also says vacancy control can be imposed on any building which has had outstanding Housing Code violations for six months or more.
     More than anything else, San Francisco needs vacancy control. The unaffordability of vacant units is the number one housing problem in San Francisco. A July, 1999, national survey once again showed San Francisco has having the most expensive rentals in the country and the rents on vacant units are forcing people from the city and preventing all but the richest from moving in. San Francisco's gentrification is caused more by the high rents on vacant units than by any other reason (the 1998 average 2-bedroom rental was $2,005).
     Over the 1980s and into the early 1990s, vacancy control was the number one agenda item for housing activists. Three times the Board of Supervisors passed vacancy control; twice it was vetoed by then-Mayor Feinstein. The third time, in 1991, it was signed by Mayor Agnos but repealed via referendum after landlords from across the country spent $10 million on their campaign.
     Vacancy control has always been a litmus test for being pro-tenant and progressive. No progressive Supervisor in San Francisco from 1979 on could be elected unless they supported vacancy control. A few politicians campaigned in support of vacancy control and then ended up voting against it—each one was soundly defeated when trying to win re-election.
      Then in 1995, the Costa Bill was passed which at first glance seemed to end the vacancy control debate via state fiat—and take the Supervisors off the hook.
 But that was just the impression—not the reality. In fact, because of Costa and the housing market, vacancy control has emerged again as the top issue.
      And today, there's two pressing reasons to adopt vacancy control as part of bringing rent control in compliance with Costa.
      First, of course, is the housing crisis caused by the outrageously high rents on vacant units. Even with inflation running at historically low levels, rents on vacant units have increased by 20-40% a year over the last three years. These huge increases are nothing short of profiteering by landlords and are in no way tied to increases in their costs and in no way can be seen as a "fair" rate of return. It's profiteering at the peoples' expense.
     A second reason, though, has nothing to do with rent control—it has to do with local control, or "home rule." The state legislature has no business passing laws which overrule local laws on issues of local concern. If Sacramento wants to deal with San Francisco's housing crisis, it should allocate money for new housing (not new jails). It has no business overruling San Francisco's local laws which deal with local issues. Rep. Jim Costa (the bill's namesake) is, in fact, from Fresno and he corralled votes from the valley and Southern California to overturn our local ordinances.
     San Francisco legislators should not stand for that and, in fact, should seek to subvert such state pre-emption whenever possible. If, for no other reason, the Costa Bill should be used to implement vacancy control.
      Currently, as noted, the SF Rent Board has forwarded to the Board of Supervisors legislation to bring the rent control law in compliance with Costa. These changes deal with everything Costa says you can't do; they do not address at all what Costa says you can do.
     This legislation is now under the "30 day rule" meaning it cannot be heard or debated until mid August at the earliest. Plans are now underway to have introduced amendments to the Rent Board's proposed compliance language. The amendments will include vacancy rent control as well as an extension of "just cause" eviction protections to buildings constructed after 1979 (similar to vacancy control, Costa says you can't extend rent control to so-called new construction but you can provide these buildings with just-cause eviction protections).