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DOWDALL LAW OFFICES A PROFESSIONAL CORPORATION ATTORNEYS AT LAW City of Santa Ana August 28, 2023 Page 7 buildings with five or more apartments. Rent control in San Francisco consists of regulated rent increases, linked to the CPI, within a tenancy, but no price regulation between tenants. New construction was exempt from rent control, since legislators did not want to discourage new development. Smaller multi -family buildings were exempt from this 1979 law change since they were viewed as more "mom and pop" ventures, and did not have market power over rents. This exemption was lifted by a 1994 San Francisco ballot initiative. Proponents of the initiative argued that small multi -family housing was now primarily owned by large businesses and should face the same rent control of large multi -family housing. Since the initial 1979 rent control law only impacted properties built from 1979 and earlier, the removal of the small multi -family exemption also only affected properties built 1979 and earlier. This led to a differential expansion in rent control in 1994 based on whether the small multi -family housing was built prior to or post 1980 a policy experiment where otherwise similar housing was treated differently by the law. To examine rent control's effects on tenant migration and neighborhood choices, DMQ examine panel data that provides address -level migration decisions and housing characteristics for the majority of adults living in San Francisco in the early 1990s. This allows them to define a treatment group of renters who lived in small multi -family apartment buildings built prior to 1980 and a control group of renters living in small multi -family housing built between 1980 and 1990. Their data allows them to follow each of these groups over time up until the present, regardless of where they migrate. Between five and ten years after the law change, the beneficiaries of rent control are 19 percent less likely to have moved to a new address, relative to the control group's migration rate. Further, impact on the likelihood of remaining in San Francisco as whole was the same, indicating a large share of the renters that rent control caused to remain at their 1994 address would have left San Francisco had they not been covered by rent control. These effects are significantly stronger among older households and among households that have already spent a number of years at their address prior to treatment. This is consistent with the fact that both of these populations are likely to be less mobile. Renters who don't need to move very often are more likely to find it worthwhile to remain in their rent controlled apartment for a long time, enabling them to accrue larger rent savings. Finally, DMQ find these effects are especially large for racial minorities, likely indicating that minorities faced greater displacement pressures in San Francisco than whites. While expansion of rent control did prevent some displacement among tenants living in San Francisco in 1994, the landlords of these properties responded to mitigate their rental losses in a number of ways. In practice, landlords have a few possible ways of removing tenants. First, -7-