Rent control

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This article is about a rent ordinance. For the movie of the same name, see Rent Control (film).

Rent Control refers to laws or ordinances that set price controls on residential housing. It functions as a price ceiling.

In the United States, rent controls were first adopted in response to WWII-era shortages, or following Richard Nixon's 1971 wage and price controls. They remain in effect in some cities with large tenant populations, such as New York, San Francisco, and Washington, DC. Smaller communities also have rent control, notably Santa Monica, and West Hollywood California along with many small towns in New Jersey. In recent years, several cities, such as Boston and Cambridge, Massachusetts, have ended rent control.

In some regions rent control laws are more commonly adopted for mobile home parks (sometimes called manufactured home communities). Reasons given for these laws include residents owning their homes (and renting the land), the high cost of moving "mobile" homes and the loss of home value when they are moved. While California, for example, has only 13 local apartment rent control laws it also has over 100 local mobile home rent control laws.

Proponents of rent control claim that it is necessary to prevent greedy landlords from imposing rent increases that force the elderly and the poor to move. Some proponents make the argument that housing is an inalienable human right and that it should equal the rights of landlords. Other advocates claim that maintaining a supply of affordable housing is essential to sustaining job growth, and to maintaining a community that includes senior citizens and people of all income groups. Homeowners who support rent control point to the neighborhood instability caused by high or frequent rent increases and the effect on schools, youth groups and community organizations when tenants move more frequently.

Opponents of rent control claim that rent control can create housing shortages, results in an overall decrease in the quality of housing stock in a city, and that its benefits accrue disproportionately to the wealthy and well-connected. They argue that the goal of making housing affordable and available to the poor can be accomplished by the same free market that created the affordable units in the first place or by government construction or subsidy.

Opponents of rent control see rent control as a violation of their property rights since they are told what they may and may not do with their property. Some opponents believe that rent control also limits their ability to sell their rent controlled property, thus essentially forcing them to put their property to work for the state without recourse. Regulation of real and other property is, however, a fact of life in modern societies. Landlords and their organizations actively use their recourse to legislatures, initiative processes and the courts to affect what regulations are in place. In particular, many legal challenges to American rent controls are based on arguments that the government has taken landlord's property without compensation. In general the courts have found that this has not happened.

Unethical landlords may resort to extralegal means to evade rent controls and may take other unfair advantage of housing conditions. Some landlords may step up discrimination against certain groups if they believe there is a surplus of prospective tenants. Jurisdictions which implement rent controls may have to pass laws in response, such as forbidding landlords from compelling new tenants to hire the landlord's moving company. In some areas with especially strict rent controls, landlords may require key money (a non-refundable deposit). Demanding key money is illegal in most of North America, but since the landlord will invariably demand it in cash it is very difficult to trace and nearly impossible to prove in court.

While the political debate over rent control is far-reaching, the purposes and provisions of such laws are intended to be limited in scope. They define which rental units are affected, and may have only larger or older rental complexes covered by the law. The frequency and degree of rent increases are limited, usually to the rate of inflation defined by the Consumer Price Index or to a fraction thereof. (San Francisco, for example, allows annual rent increases of 60% of the CPI.) Unregulated rent increases may be allowed when a tenant moves ("vacancy decontrol"). Landlords have an opportunity to show that they are not receiving a fair return, for example by proving an increase in costs (such as capital improvements) that should be passed on to tenants. Tenants may be able to claim that decreased services or the lack of necessary repairs offset such additional increases or justify a rent reduction. Landlords may be required to register current rent levels or provide other information on rent increases and/or terminations of tenancy. (Since rent control laws vary considerably from jurisdiction to jurisdiction, landlords and tenants who may be affected should contact their local jurisdiction to obtain information on which law, if any, which applies to them).

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