CORRESPONDENCE - WS-1 OPPOSITION

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removed the original 1979 exemption for small multifamily housing of four units or less, as discussed in Section 2. In 1994, as a result of the ballot initiative, tenants who happened to live in small mul- tifamily housing built prior to 1980 were, all of a sudden, protected by statute against rent increases. Tenants who lived in small multifamily housing built 1980 and later continued to not receive rent control protections. We therefore use as our treatment group those renters who, as of December 31 1993, lived in multifamily buildings of less than or equal to 4 units, built between years 1900 and 1979. We use as our control group those renters who, as of December 31, 1993, lived in multifamily buildings of less than or equal to 4 units, built be- tween the years of 1980 and 1990. We exclude those renters who lived in small multifamily buildings constructed post 1990 since individuals who choose to live in new construction may constitute a selected sample and exhibit differential trends. We also exclude tenants who moved into their property prior to 1980, as the none of the control group buildings would have been constructed at the time. When examining the impact of rent control on the parcels themselves, we use small multifamily buildings built between the years of 1900 and 1979 as our treatment group and buildings built between the years of 1980 and 1990 as our control group. We once again exclude buildings constructed in the early 1990s to remove any differential effects of new construction. Figure 2 shows the geographic distribution of treated buildings and control buildings in San Francisco. 4.1 Tenant Effects We begin our analysis by studying the impact of rent control provisions on its tenant bene- ficiaries. We use a differences -in -differences design described above, with the following exact specification: Yt = Sit + of + Qt * Tz +'yst + Eit. (1) 11