Global InformationRent control in the United States information
| Part of a series on |
| Living spaces |
|---|
 |
|
Assisted living • Cottage homes • Foster care • Group home • Halfway house • Homeless shelter • Hospital • Nursing home • Orphanage • Prison • Psychiatric hospital • Residential care • Retirement home • Residential treatment center • Retirement community • Supportive housing • Supported living  Housing portal |
In the United States, rent control refers to laws or ordinances that set price controls on the rent of residential housing to function as a price ceiling.[1] More loosely, "rent control" describes several types of price control:
- "strict price ceilings", also known as "rent freeze" systems, or "absolute" or "first generation" rent controls, in which no increases in rent are allowed at all (rent is typically frozen at the rate existing when the law was enacted);
- "vacancy control", also known as "strict" or "strong" rent control, in which the rental price can rise but continues to be regulated in between tenancies (a new tenant pays almost the same rent as the previous tenant); and
- "vacancy decontrol", also known as "tenancy" or "second-generation" rent control, which limits price increases during a tenancy but allows rents to rise to market rate between tenancies (new tenants pay market rate rent but increases are limited as long as they remain).[1]
As of 2022, seven states (California, New York, New Jersey, Maryland, Maine, Oregon, and Minnesota) and the District of Columbia have localities in which some form of residential rent control is in effect (for normal structures, excluding mobile homes).[2] Thirty-seven states either prohibit or preempt rent control, while seven states allow their cities to enact rent control but have no cities that have implemented it.[3][4] For localities with rent control, it often covers a large percentage of that city's stock of rental units. For example, in New York City as of 2017, 45% of rental units were "rent stabilized" and 1% were "rent controlled" (these are different legal classifications in NYC).[5] In the District of Columbia as of 2019, about 36% of rental units were rent controlled.[6] In San Francisco as of 2014, about 75% of all rental units were rent controlled,[7]: 1 and in Los Angeles in 2014, 80% of multifamily units were rent controlled.[8]: 1
In 2019, Oregon's legislature passed a bill which made the state the first in the nation to adopt a state-wide rent control policy. This new law limits annual rent increases to inflation plus 7 percent, includes vacancy decontrol (market rate between tenancies), exempts new construction for 15 years, and keeps the current state ban on local rent control policies (state level preemption) intact.[9]: 1 [10]: 1 In November 2021, voters in Saint Paul, Minnesota, passed a rent control ballot initiative that capped annual rent increases at 3 percent, included vacancy control, and did not exempt new construction or allow inflation to be added to the allowable rate increase.[11][12] This resulted in an 80% reduction in requests for new multifamily housing permits, while in neighboring Minneapolis, where voters authorized the city council to craft a rent control ordinance which might exempt new construction, permits were up 70%.[11][13]
There is a consensus among economists that rent control reduces the quality and quantity of rental housing units.[14][15][16][17][18][19][20][21] Other observers see rent control as benefiting the renter, preventing excessive rent increases and unfair evictions. Rent control may stabilize a community, promoting continuity, and it may mitigate income inequality.[22][23][24]
- ^ a b Cite error: The named reference
GPGwas invoked but never defined (see the help page). - ^ "Rent Control Laws by State". www.nmhc.org. Retrieved 2023-03-17.
- ^ Cite error: The named reference
NMHCwas invoked but never defined (see the help page). - ^ Cite error: The named reference
rentprep_comwas invoked but never defined (see the help page). - ^ Waickman, C. R., Jerome, J. B. R., Place, R. Sociodemographics of Rent Stabilized Tenants. New York City Department of Housing Preservation and Development, 2018.
- ^ "Roughly 36 percent of D.C.'s rental housing units are rent-stabilized". D.C. Policy Center. 4 December 2019. Retrieved 2022-09-14.
- ^ Cite error: The named reference
SF_RC_percentwas invoked but never defined (see the help page). - ^ Cite error: The named reference
LA_RC_percentwas invoked but never defined (see the help page). - ^ Cite error: The named reference
NPR_Oregon_RCwas invoked but never defined (see the help page). - ^ Cite error: The named reference
OL_OR_RCwas invoked but never defined (see the help page). - ^ a b Britschgi, Christian (2022-03-22). "America's Most Controversial Rent Control Law Is Getting a Hasty Makeover - A collapse in new development activity followed St. Paul voters' approval of a strict, vaguely written rent control ordinance. City and state officials are scrambling over how best to fix the new law". Reason.
Tomorrow the St. Paul City Council will discuss the details of implementing Question 1, a brief, voter-passed ordinance that caps annual rent increases at 3 percent and which includes none of the typical exemptions or allowances for new construction, vacant units, or inflation. ... California and Oregon policies also include a number of other exemptions to their state-level rent control laws. They allow property owners, up to a point, to add inflation to allowable rent increases. They both allow landlords to raise rents as high as they want between tenants and have higher caps on rent increases: 5 percent in California and 7 percent in Oregon.
- ^ Galioto, Katie (2021-11-20). "Fearing a spike, tenant advocates keep a close eye on St. Paul rents". Star Tribune.
More than 30,000 St. Paul residents — about 53% of voters — approved an ordinance by referendum earlier this month that will cap annual rent increases at 3%. The city has yet to hammer out the finer points of its new policy, which has been pegged as one of the most stringent rent control measures in the nation because it does not allow landlords to raise rents once a tenant moves out, does not exempt new construction and is not tied to inflation.
- ^ Callaghan, Peter (2022-03-16). "Minnesota Senate committee moves bill to retroactively cancel rent control measures passed by voters in Minneapolis, St. Paul". MinnPost.
Draheim also cited Census Bureau statistics that show requests for housing permits has fallen 80 percent in St. Paul since the passage of the referendum. In Minneapolis, which hasn't drafted an ordinance yet and where new buildings could be exempt from caps, permits are up 68 percent.
- ^ "Rent Control". Clark Center Forum. Retrieved 2024-05-29.
- ^ Baumol, William J; Blinder, Alan S. (1994). Economics Principles and Policy (6th ed.). Dryden Press. pp. 92–93, 379. ISBN 0-03-098927-2.
- ^ Cooter, Robert; Ulen, Thomas (1997). Law and Economics 2nd Edition. Addison-Wesley. pp. 32–33.
- ^ David A Besanko; Ronald R. Braeutigam (2008). "10.5". Microeconomics (3rd ed.). Hoboken, New Jersey: John Wiley & Sons. pp. 374–377. ISBN 978-0470-04924-2.
- ^ B. Douglas Bernheim; Michael D Whinston (2008). Microeconomics (1st ed.). McGraw-Hill Irwin. p. 565. ISBN 978-0-07-290027-9.
- ^ Dougherty, Conor (12 October 2018). "Why Rent Control Is a Lightning Rod". The New York Times. Retrieved 26 March 2019.
And yet economists from both the right and the left are in almost universal agreement that rent control makes housing problems worse in the long run.
- ^ Mankiw, N. Gregory (2015). Principles of Economics. Boston, MA: Cengage Learning. p. 31. ISBN 978-1-305-58512-6.
- ^ Brandts, Jordi; Busom, Isabel; Lopez-Mayan, Cristina; Panadés, Judith (2022). "Pictures are worth many words: Effectiveness of visual communication in dispelling the rent-control misconception". SSRN Electronic Journal. doi:10.2139/ssrn.4037381. hdl:2445/183641. ISSN 1556-5068. S2CID 247724304.
- ^ Barton, Stephen (April 15, 2018). "Stephen Barton: Why rent control is a good thing". Santa Cruz Sentinel. Retrieved August 17, 2022.
- ^ Barton, Stephen (July 3, 2018). "Steady rise in Bay Area rents fuels debate over November measure". San Jose Mercury News. Retrieved August 17, 2022.
- ^ Walker, Richard (March 2016). "Why Is There a Housing Crisis?". East Bay Express. Retrieved August 17, 2022.