Rent-controlled units are more abundant in SF than Manhattan

San Francisco’s homes have surpassed those in New York City as the priciest to rent among the nation’s largest cities, but it’s actually easier to find a rent-controlled unit in The City than in Manhattan.

That’s according to a report released Thursday by San Francisco-based real estate website Trulia, which tracked rent-controlled and rent-stabilized housing units in The City and Manhattan to determine how rent regulations stack up in each metropolis.

The report found that New York City’s complicated rent control laws allow for more units to become deregulated than in San Francisco. Namely, two major exceptions to rental laws – if the legal rent exceeds $2,700 or if a building was converted into a co-op – allow for the deregulation of rental units in Manhattan.

Unlike San Francisco, New York City has two types of rent increase restrictions: rent control, which constitutes a building constructed before February 1947 and a tenant who has lived in that home continuously since before July 1, 1971; and rent stabilization, which includes buildings with at least six units that were built between Feb. 1, 1947 and Jan. 1, 1974.

And it gets more complicated: when a rent-controlled tenant moves out of a unit in New York City, the apartment is no longer rent-controlled, and if it’s in a building with less than six units, it becomes deregulated.

Rent increases in rent-stabilized units in Manhattan are determined by an annual vote among the nine-member Rent Guidelines Board, which this year made the unprecedented decision to freeze rents on one-year leases between Oct. 1, 2015, and Sept. 30, 2016, according to the report.

Landlords, however, may raise rents 7.5 percent each year in rent-controlled units until they have reached a maximum base unit, which varies, based upon the property.

San Francisco’s rent control rules are more clear-cut, thus allowing more units to remain as rent-controlled over the years. Only units that were issued a certificate of occupancy before June 13, 1979, are rent-controlled, and landlords can only increase rents by 60 percent of the Bay Area Consumer Price Index, which is currently the equivalent of a 1.9 percent annual increase.

Landlords in San Francisco also cannot increase rents until the tenant has lived in the property for a full year, and rent cannot be raised within 12 months of the last increase.

“There’s a lot of wiggle room for lots of units in New York City to not be rent-controlled or stabilized,” said Mark Uh, Trulia’s data scientist and author of the report. “In San Francisco, there’s a lot more rent-controlled units because there’s not [as many] loopholes as New York City’s laws.”

To Uh’s surprise, the report found that San Francisco neighborhoods with the greatest number of rent-control units include those that are older and have less new construction, like the Marina, Nob Hill, the Sunset and the Tenderloin. In Manhattan, however, the less expensive neighborhoods like Harlem and Washington Heights have more rent-stabilized units.

“Even desirable neighborhoods have lots of rent-controlled housing stock,” Uh said. “It did surprise me and it’s probably a good thing if you’re looking for an apartment and you want to find something that’s rent-controlled.”

San Francisco does not require landlords to register rental units, so there is no way to track exactly how many rent-controlled units exist. The closest The City comes to maintaining that data is through rental unit fees that landlords must pay in conjunction with their property taxes.

Landlords pay that fee for about 173,000 rental units today, compared to around 179,000 units more than a decade ago, said Delene Wolf executive director of the San Francisco Rent Board.

But Jennifer Fieber, policy director of the San Francisco Tenants Union, cautioned that just because a home is rent-controlled doesn’t mean that it’s inexpensive.

“It may be easier to find these apartments [in The City], but it doesn’t mean you’re better off like you would be getting a stabilized apartment in New York,” Fieber said.

She noted that rent-stabilized apartments in Manhattan also provide a form of vacancy control, because of the limit on how much landlords can raise the rent of such units. San Francisco landlords can raise the rent to market-rate when a new tenant moves in, even if the unit is still rent-controlled.

The report can be viewed by clicking here

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