More than 12 states are considering some form of rent control in light of skyrocketing rents.
Revival of Long Dormant Rent Control Policies
Rents have risen approximately +18% in the last two years, according to The Wall Street Journal. In 2021 alone, the cost of rent climbed +11%, a rate three times faster than in a “normal” year. Certainly, one of the main reasons contributing to our economy’s +40-year-high inflation rate of 7.9% is rising rental prices.
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According to Stijn Van Nieuwerburgh, an economist and professor with Columbia Business School who researches rent control, “Rents are exploding at a pace far faster than income. The problem is now as bad as it has ever been. And probably, much worse.”
Statewide Rent Control Policies
Cities large and small in states large and small are responding to massive increases in rent prices with revivals of rent control policies. To date, according to The Journal, more than a dozen states have tacked on rent control to their legislative agendas for discussion and debate.
California and Oregon have already enacted statewide rent control laws. California restricts rent price increases to not more than 10% annually. Oregon’s rent control law restricts rent hikes to the consumer price index plus no more than 7% annually.
Rental properties in St. Paul MN are to be subject to a maximum rent increase of 3% annually after voters recently approved such an ordinance.
Legislators in Florida are hoping to overturn rent control bans in the Sunshine State. Voters in Midwest cities have approved rent-control measures and members of Congress are currently floating the concept of a national rent-control policy.
According to the National Apartment Association, approximately three dozen states have restrictions on rent control.
Opposition to Rent Control
As you might expect, property owners across the country are fighting hard against any and all rent-control efforts.
Officials in Miami, for example, are studying ways to work around pre-exemptions on rent control while rationalizing their positions by discussing huge jumps in housing costs.
However, a committee focused on housing in Miami-Dade County voted 3-2 to look at whether or not the county is facing a “housing emergency.” If this committee’s findings agree that there is such an emergency, this area of the country could move to pass a law implementing rent control efforts in Florida as well.
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Thanks to The Wall Street Journal and Inman.