Rational Eviction: How Landlords Use Evictions in Response to Rent Control

Abstract

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 in a vacancy decontrol system. Evictions may reduce both the anti-displacement and rent reduction effects of rent control. 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 a zip code with the average level of treatment experiences an additional 34 eviction notices, an 83% increase, and an additional 13 wrongful eviction claims, a 125% increase. These effects were concentrated in low income ZIP codes and were larger in years when average rent prices rose faster than the allowed rent increases for controlled units.

Keywords: rent control, evictions

JEL Classification: R28, R31, R38, H70