Housing Advocates Push for Rent Control

January 18, 2018

With rising rents, advocacy groups are urging lawmakers to pass laws that cap just how much rents can go up.

The Alliance of Californians for Community Empowerment and the San Francisco Tenants Union are two such groups pressing the issue in California. They are trying to get a proposed law on an upcoming ballot that would permit greater rent regulation.

“If you’re an owner of apartments, rent controls are a very, very scary thing,” John Sebree, director of the national multi-housing group for Marcus & Millichap, a brokerage firm, told the National Real Estate Investor.

In many parts of the country, lawmakers are not allowed to create new rules to limit how much landlords can raise rents at their properties. Only five states have rent regulation or rent control laws currently: California, Maryland, New York, New Jersey, and Washington, D.C. But even in those states, rent regulation usually does not extend to the rents on new apartment units, National Real Estate Investor reports.

For instance, in California, rent control laws do not apply to housing built after 1995 ; many older properties are also exempted. In New York, its rent stabilization law only applies to housing built prior to 1974. Further, New York apartments are no longer held under rent regulation once rents increase above $2,700 a month and they become vacant. As such, the number of rent-controlled apartments in New York is drastically shrinking. 

More than two-thirds of states have laws that make it impossible for local governments to create rent regulations that restrict the ability of landlords to set their rental rates as high as the market will support, National Real Estate Investor says. But housing advocates hope to change the law. Recent efforts by advocates in Illinois, Massachusetts, Michigan, and Oregon are trying to remove the ban against rent control laws in their states.

Multifamily developers argue that rent regulation applied to new construction would reduce the incentive to build new housing. A smaller number of rental units would in turn create greater competition for housing.

“If there is a negative effect on housing supply, you’re not really moving the affordable housing discussion ahead,” says Rebekah King, acting director of policy for the National Housing Conference, a nonprofit organization focused on affordable housing.

Source: “As Rents Rise, Advocates in Multiple Markets Push for New Rent Control Laws,” National Real Estate Investor (Jan. 16, 2018)