Agda Pkt 2026.07.07 Special Council Meeting

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REDWOOD CITY 9212 Economic & Planning Systems, Inc. 11 Rent Control Literature Review which increased the cost of rental housing.13 The shift toward For-Sale housing and the increased price of rental housing together directed San Francisco’s housing stock toward higher income households. It is important to note that rent control itself was not the direct cause of increased rents, but landlord reactions to the policy. Therefore, this response is of the highest concern for markets where single family rental properties make up a large portion of the rental stock, since these are the easiest properties to convert through sale as individual ownership units. Additionally, potential impacts from rent control also will depend on the specific requirements of the policy itself. For example, a 2026 University of California, Los Angeles study published found that the less restrictive rent caps included in the California’s Tenant Protection Act of 2019 created minimal supply distortions in San Diego (the TPA allows rent increase of five percent (5%) per year plus CPI up to ten percent (10%) and is significantly less restrictive than the proposed Ordinance).14 Impacts on Economic Inequality Economists have made varying conclusions on how rent control impacts inequality. As noted in the DMQ paper, by slowing displacement of lower income households and potentially skewing the housing market toward higher income households, rent control can increase a city’s income inequality. Strict demolition and owner move-in protections could potentially lessen this phenomenon. Conversely, rent control has been documented to decrease wealth and income inequality in contexts with strict policies. Using data from 16 countries, authors Kholodilin and Kohl evaluated the relationship between rent control policies and economic inequality.15 Since landlords typically have higher incomes than average renters, Kholodilin and Kohl argue that rent controls can have effects similar to progressive income taxation. Rent controls decrease income inequality through three mechanisms: increased renter disposable income, reduced landlord incomes, and lowered capital-wealth ratios. The authors note that policies need to be strict in order to have tangible effects. A 2024 Urban Institute study suggests that the above effects may be partially offset by potential reduction in rental supply, particularly for units that target renters with moderate and above incomes. Specifically, this national study found that rent control was linked to an increase in rental units affordable to extremely 13 The potential for rent control to reduce the supply of rental housing was also a finding from a 2024 Urban Institute study entitled “Rent Control and the Supply of Affordable Housing.” Authored by Christina Stacy, Timothy R. Hodge, Timothy M. Komarek, Christopher Davis, Alena Sterne, Owen Noblef, Jorge Morales-Burnett, and Amy Rogin. 14 See, “Third Generation Rent Control: Evidence from San Diego,” by Stuart Gabriel and S. Sayantani. March 1, 2026. 15 Rent price control – yet another great equalizer of economic inequalities? Evidence from a century of historical data - Konstantin A Kholodilin, Sebastian Kohl, 2023 (sagepub.com) 8.A. - Page 139 of 168 149