Rent Control Can Create Incentives To Evict

As elementary microeconomic analysis would expect, rent control policies that reset when you have a new tenant encourage landlords to evict tenants more often (sometimes wrongfully). This effect is an especially strong one in low income neighborhoods.

Rent control policies seek to ensure affordable and stable housing for current tenants; however, they also increase the incentive for landlords to evict tenants since rents re-set when tenants leave. We exploit variation across zip codes in policy exposure to the 1994 rent control referendum in San Francisco to study the effects of rent control on eviction behavior. We find that for every 1,000 newly rent controlled units in a zip code, there were 12.05 additional eviction notices filed in that zip code and an additional 4.6 wrongful eviction claims. These effects were concentrated in low income zip codes.

Eilidh Geddes and Nicole Holz, "Rational Eviction: How Landlords Use Evictions in Response to Rent Control" (June 2, 2022).

The body text of the paper further clarifies that:

We find an 82% increase in eviction notices filed with the Rent Board and a 124% increase in the number of wrongful eviction claims for zip codes with the average level of new exposure to rent control. 

The increase in evictions occurs gradually over the five years following the policy change, likely due to market rents (and therefore incentives to evict) increasing over time. 

Finally, we document heterogeneity with respect to median income in a given zip code, where effects on low income zip codes are 66%-200% higher than effects in high income zip codes.

This implies that the annual pre-rent control rate of rightful eviction notices was 14.7 per 1,000 rental units and that the annual pre-rent control rate of wrongful eviction notices was 3.7 per 1,000 rental units. 

The statistically estimated annual rate of rightful eviction notices in rent controlled rental units is 26.75 per 1,000 (up to 50.15 in low income areas) and the statistically estimated annual rate of wrongful eviction notices in rent controlled rental units is 8.3 per 1,000 (up to 17.5 in low income areas).

This also implies that the status quo was that 20% of attempted evictions were wrongful, and that statistically, the percentage of attempted evictions that were wrongful in rent controlled units was 24%, with a wrongful eviction percentage of 26% or more in low income areas.