Rent Control Is Only the Beginning
Three Bay Area ballot measures illustrate how rent regulation
has evolved into something far more expansive than limits
on annual rent increases.
And multiplied.
Thirty Years Ago,
Our World Was Smaller.
When our team began practicing landlord-tenant law nearly three decades ago, the local rent-control ordinances we primarily dealt with were in San Francisco, Oakland, and Berkeley.
Today, the landscape is almost unrecognizable. Rent regulation has spread across the region, with cities adopting their own rules, procedures, exemptions, and enforcement mechanisms. What applies to a rental property in one jurisdiction may look very different just a few miles away.
And the scope of these laws has changed just as dramatically. What began primarily as a way to limit rent increases now reaches into nearly every aspect of the landlord-tenant relationship.
It's about much more than rent increases.
- Annual rent increase limits
- Just-cause eviction requirements
- Owner move-in restrictions
- Relocation payments
- Tenant buyout agreements
- Anti-harassment protections
- Minimum lease terms
- Lease renewal requirements
- Tenant organizing rights
- Substantial remodel restrictions
- Rights of return
- Rent rollbacks
- Banked rent increases
- Housing service reductions
- Capital improvement pass-throughs
- Rental registration requirements
- Administrative fees
- Rent board petitions
- Hearings and appeals
- Enforcement and penalties
What began as an effort to regulate rents has evolved into a comprehensive system governing nearly every aspect of the landlord-tenant relationship.
Redwood City: Measure E
Redwood City offers a particularly revealing example of how far rent regulation can extend. Measure E is not simply a proposal to limit annual rent increases. It would establish a broader framework governing rental housing, with new obligations for property owners and new administrative responsibilities for the city.
For covered rental units, the measure would limit annual rent increases to 60% of the change in the applicable Consumer Price Index (CPI), with a maximum increase of 5%. But the rent ceiling is only one part of the proposal.
- Rent stabilization: A formula limiting annual increases for covered units, with a petition process allowing owners to seek adjustments necessary to obtain a fair return.
- Rent rollback: Provisions generally tying permissible rents for qualifying existing tenancies to October 29, 2025 levels, subject to applicable adjustments and exceptions.
- Just-cause eviction protections: Additional restrictions on when and how a tenancy may be terminated.
- Relocation assistance: Financial obligations in qualifying no-fault displacement situations, including payments of four months' fair market rent or $12,000, whichever is greater, with an additional $6,000 for certain qualifying tenants.
- Administrative oversight: Registration, compliance procedures, and mechanisms for resolving disputes.
- Enforcement: Procedures and potential consequences for violations of applicable requirements.
EXEMPT FROM THE CAP DOESN'T MEAN EXEMPT FROM THE ORDINANCE
One of the most important distinctions for owners is the difference between an exemption from rent stabilization and an exemption from other provisions of the measure. California's Costa-Hawkins Rental Housing Act limits which properties can be subjected to local rent ceilings, but those limitations do not automatically exempt the same properties from just-cause eviction protections, relocation obligations, or other requirements. A property that is not subject to the proposed rent ceiling may still face separate obligations under the ordinance, depending on the property type and the provision involved.
San Pablo: Measure S
San Pablo's Measure S follows a similar approach, combining limits on annual rent increases with broader tenant protections. Both cities propose allowing annual increases of 60% of CPI, but San Pablo would impose a lower maximum of 3%, compared with Redwood City's 5%.
The measures also use different rent rollback dates: July 1, 2025, in San Pablo and October 29, 2025, in Redwood City. Both provide mechanisms for owners to seek increases above the ordinary cap to obtain a fair return.
- Rent stabilization: Annual increases limited to 60% of the applicable CPI change, with a maximum of 3% for covered units.
- Rent rollback: July 1, 2025, serves as the reference date for determining permissible rents for qualifying existing tenancies, subject to applicable adjustments and exceptions.
- Just-cause eviction protections: Rules governing permissible grounds for terminating a tenancy.
- Relocation assistance: Financial obligations for owners in qualifying displacement situations.
- Fair-return petitions: A process allowing owners to seek adjustments necessary to obtain a constitutionally required fair return on their investment.
- Administration and enforcement: Procedures for implementing, administering, and enforcing the proposed requirements.
San Pablo: 60% of CPI, capped at 3%
Illustrative calculation: 3.8% CPI × 60% = 2.28%
Actual allowable increases depend on the CPI figures applicable to each ordinance.
Berkeley: Measure X
Berkeley already has one of the Bay Area's most established rent-control systems. Measure X would modify that framework rather than create an entirely new one. Its provisions illustrate how rent regulation can reach beyond the amount of rent an owner may collect.
The proposal addresses rent increases, administrative fees, tenant-organizing protections, and registration requirements. Some changes would affect the economics of owning rental property, while others would influence how owners and managers interact with tenants.
- Annual rent increases: A proposed 10% ceiling on periodic increases for fully covered units, including increases that draw on previously banked Annual General Adjustments. Owners could still bank unused adjustments, but their ability to recover accumulated increases in a single adjustment would be limited.
- Rent Board fees: Authority for the Rent Board to adopt regulations reducing or waiving fees for qualifying subsidized housing owned, leased, or controlled by nonprofit organizations. Relief would not be automatic.
- Tenant organizing: Expanded protections for tenant associations at properties with five or more rental units, whether or not a qualifying professional property manager is involved. Separate provisions may apply to smaller properties.
- Existing tenancies: Certain exemptions generally could not be claimed if the property became eligible only after the current tenancy began. For example, an owner-occupied duplex exemption arising during an existing tenancy generally could not eliminate protections the tenant already had. The measure includes exceptions and transitional provisions, including treatment of units exempt before November 3, 2026.
- Registration requirements: Beginning in 2027, the annual registration fee deadline would move from July 1 to September 30.
A POTENTIAL TRADE-OFF
Consider a Berkeley owner who chooses not to impose an allowable rent increase because a longtime tenant is struggling financially. Under the existing banking system, the owner may preserve that unused increase for later. Measure X would limit how much of those accumulated increases could be applied in any single adjustment.
That could create an incentive for some owners to raise rents more regularly rather than postpone increases. A restriction aimed at limiting large, sudden increases could also reduce the flexibility that sometimes allows owners to defer them.
The tenant-organizing provisions present a separate operational consideration. Berkeley already extends certain organizing protections to smaller properties involving professional management. Measure X would broaden the framework to include properties with five or more rental units regardless of that distinction, potentially changing the responsibilities of owners who manage their buildings themselves.
Regulation Comes With a Price Tag
Redwood City's Measure E and San Pablo's Measure S are citizen-initiated proposals. If voters approve them, the cities would be responsible for administering the resulting regulatory programs. Registration systems, petitions, hearings, enforcement, and dispute resolution all require personnel, infrastructure, and funding.
The cities' commissioned fiscal analyses estimate the annual cost of administering these programs.
Redwood City's proposed ordinance identifies initial annual fees of $84 or $120 per unit, depending on the category. Yet the city's consultant estimated that those fees would cover only 13% to 32% of projected administration costs. The estimated annual net cost to the city, after accounting for initial fee revenue, was approximately $4 million to $10.1 million. Higher cost-recovery fees or other financing arrangements could therefore become necessary.
San Pablo's proposal expressly calls for annual rental property owner fees to fund administration. Mayor Elizabeth Pabon-Alvarado and Vice Mayor Rita Xavier have opposed the measure, citing concerns about the costs of a new regulatory program and the financial burden on housing providers. The ultimate fee amounts and their allocation remain implementation questions.
Three Questions Every Property Owner Should Ask
Does the ordinance actually apply to my property?
A property may be exempt from rent caps but still subject to just-cause eviction protections, registration requirements, or other provisions. Exemptions vary by jurisdiction, property type, and the particular requirement involved.
What obligations exist beyond limiting rent increases?
Rent regulation can govern notices, relocation payments, tenant organizing, hearings, and enforcement procedures. Understanding the full ordinance matters just as much as knowing the maximum allowable annual increase.
What will compliance cost, and what happens if I get it wrong?
Registration fees and administrative expenses are only part of the equation. Failure to follow applicable procedures can lead to disputes, penalties, delayed proceedings, and potentially costly litigation.
If Voters Approve, the Fine Print Becomes the Law.
Voters may focus on the promise of limiting rent increases. Property owners must also consider the entire ordinance: its exemptions, procedures, registration requirements, financial obligations, and enforcement provisions.
The measures in Redwood City, San Pablo, and Berkeley illustrate a broader shift in California housing regulation. The debate extends beyond how much rent an owner may charge to encompass how rental housing is operated.
The question is no longer simply how much rent an owner can charge. It is which rules govern the relationship, and whether the owner understands them.
Bornstein Law helps Bay Area rental property owners and housing providers navigate these increasingly complex requirements. Have a question about how local regulations affect your property? Start a conversation.