Protection for Tenants: Rent Control
Q: What is rent control?
A: “Rent control” applies to laws or governmental regulations which limit the amount of rent or rental increase a landlord is legally able to charge.
Q: How does rent control regulate the cost of rent?
A: Usually the mayor of the city with rent control, such as San Francisco, appoints a board to administer the law. Decisions, such as how much the annual rent increases will be and whether individual landlords get extra rent increases, are decided by the board. Some communities elect the rent control board members directly. Some observers believe that by having an elected board, it will be more independent from landlords.
Sidebar: Ability to Pay
Rent control does not consider a tenant’s ability to pay, nor is it a social welfare program providing subsidies to the tenant. Even in areas with rent control, there are tenants spending too large a percentage of their incomes on rent. Rent control does not make housing affordable for everyone.
Q: What kinds of rent control laws are there?
A: New York City was the only municipality in the country to retain rent control after the end of World War II. The law there did not permit rent increases without specific permission from an administrative board. Rents could be raised based upon a pass-through of certain expense increases, such as the cost of fuel.
From the late 1960s through 1978 other communities adopted rent control. Most of these laws allow automatic but limited rent increases without any requirement of showing expense increases. Landlords are allowed to petition for larger increases on the basis of major repairs or extraordinarily large expenses that the normal rent increase would not cover. These so-called second-generation rent control laws have prevented some of the large rent increases experienced by tenants in other cities.
Q: What areas of the country have rent control?
A: The District of Columbia and some municipalities in Massachusetts, New York, New Jersey, and California have passed rent control ordinances. Some state legislatures have outlawed local rent control ordinances. Perhaps 10 percent of the tenants in the country are covered by some form of rent control
Protection for Tenants: Rent Control
Q: Are there state laws against rent control?
A: Yes. Legislatures in about half of the states have prohibited municipalities to endorse rent control ordinances. For example, in 1987, after the voters of Detroit enacted rent control by referendum, the Michigan Legislature passed a law revoking the right of cities to implement rent control laws.
Q: Has there ever been nationwide rent control in the United States?
A: Yes. Nationwide rent controls existed during World War II. Under President Nixon, the U.S. imposed rent controls in 1971 in an attempt to control inflation.
All public housing has rent control by definition, because the government sets the rent level for each tenant. Privately owned rental housing, in which the government gives some special subsidy to the developer or landlord, has rent control because the landlord is required to secure the approval of the government before raising rental fees. Most privately owned rental housing is subject to rent control only if the local or state government has passed a rent control ordinance or statute.
Q: What is vacancy decontrol?
A: A provision of a rent control law that allows landlords to charge whatever rent they can collect from a new tenant who moves in to fill a vacancy is termed “vacancy decontrol”. This is really an anti-rent-control provision. Within a few years, new tenants in the same building can be paying twice as much as old tenants. Not only does the landlord collect more rent with vacancy decontrol, but public support for rent control is undermined by the unfairness of treatment.