Amendments To SB 827 Would Make It Expensive To Displace Rent-Controlled Tenants & Require Full Compensation

Some opponents of SB 827 (Wiener) — to essentially upzone residential areas adjacent to major transit stops — simply reject the idea of any new housing in their neighborhoods. Others are generally hostile to new market-rate development. But besides those non-helpful objections, the one compelling knock on the SB 827 approach is that the new residential development it would unleash could displace low-income renters.

There’s a clear moral objection to that happening. With the housing shortage and jobs boom leading to high home prices and rents everywhere, low-income residents of rent-controlled units will basically have no place affordable to go if they’re displaced. The bill shouldn’t force some of the most economically insecure and impoverished among us out of their homes.

And displacement also potentially undermines one of the key purposes of the bill: to boost transit ridership. Low-income people are more likely to use transit than higher-income people. So replacing them with market-rate renters or owners could be a loss for the nearby transit system.

That said, I do believe the concern is overstated, as low-income neighborhoods are not likely to be a prime target of developers risking capital on expensive multi-family buildings and needing a high return to justify the expense.

But still, we knew anti-displacement measures in SB 827 were coming, and yesterday Sen. Wiener introduced them. They essentially boil down to two things:

1) Explicit recognition that SB 827 does not preempt local policies preventing demolition of rent-controlled units or displacement of those tenants or requiring affordable units to be built with market-rate ones. This recognition is probably not needed legally, but it’s a handy reminder to critics that SB 827 takes nothing away from locals on the issues of affordability and displacement.

2) Making it expensive to displace residents of rent-controlled units.

This second approach is where the amendments get interesting. Basically, if any SB 827 project displaces these residents, the developer must honor a “Right to Remain Guarantee.” As Sen. Wiener explains in a blog post:

[The guarantee] must, at minimum, provide all of the following, at the developer’s expense:

  • All moving expenses for a tenants moving into, and out of, an interim unit in the area while the project is being built.

  • Up to 42 months of rental assistance that covers the full rent of an available, comparable unit in the area.

  • Right of first refusal for housing units in the new building, and offered with a new lease at the rent previously enjoyed by the tenant in their demolished unit.

So displacement could still happen, but only at significant expense and with displaced residents being “made whole” by the process. It’s essentially a quasi-market-based approach to discouraging displacement. It will incentivize developers to seek to redevelop properties that don’t have rent-controlled units on them to avoid these costs.

In addition, a separate amendment requires a local jurisdiction to adopt a demolition process for rent-controlled units if they don’t already have one, for any SB 827 project to occur.

It remains to be seen whether anti-displacement critics of the bill will be mollified by this approach. But I do think these changes make the bill stronger, without conceding too much of the market-rate development we still need for residents of all incomes in our state.


One thought on “Amendments To SB 827 Would Make It Expensive To Displace Rent-Controlled Tenants & Require Full Compensation

Comments are closed.