Rent Control - Residents Talking Points While rent control on its face appears to be a good strategy to help low- and moderate-income individuals, it would in fact do more harm than good. Rent control creates winners and losers and ultimately favors affluent citizens of the community. “You don’t want to be the next San Francisco.” It’s no coincidence that the most recognizable rent-controlled jurisdictions also have the worst affordable housing problems. It is a common strategy in these jurisdictions to ensure success in obtaining a rent-controlled apartment by being the first in the line to apply and bringing cash. Often, a greater number of renters compete for a limited number of rent controlled units. Through a system of patronage, only a select few who “know someone” or have the flexibility to go through an exhaustive search process benefit from rent control. With steep competition, renters with more financial resources, and ready access to cash, have an advantage over those without. Renters who are more financially secure also can afford to pay real estate broker commissions to help them obtain a coveted rent-controlled unit. With almost no exceptions, anyone along the economic spectrum can take advantage of rentregulated units, regardless of their financial situation. Simply put, there is no access to units afforded those with the greatest need under rent control. This is in stark contrast to the Section 8 Housing Choice Voucher Program, Supplemental Nutrition Assistance Program (SNAP), Temporary Assistance for Needy Families (TANF) or other common forms of financial assistance for low income populations.
32 RENTAL HOUSING
| JULY 2019 |
ebrha.com
Rent control policies require large bureaucracies called “rent boards” to enforce the law. Among its enumerated duties, the local rent board adjudicates eviction proceedings and makes it more difficult to remove problem residents in rent-controlled units. Property owners of rent controlled housing become more risk averse and place greater emphasis on credit scores and income levels in resident selection. Since affluent renters reap the most benefits from rent control, and low and middle-income residents find themselves at a distinct disadvantage, it should come as no surprise that these policies can aggravate unintended consequences of gentrification. Displacement of residents is exacerbated by a decline in the supply of rental housing in rent-controlled jurisdictions, as housing providers choose to covert to condominiums, or commercial property or housing otherwise not subject to price controls. Property owners in these jurisdictions also respond to rent control—and even the threat of rent control being enacted— by selling off their properties or increasing rents. To ensure rent control does not stymie housing construction, jurisdictions exempt new development. Therefore, older apartment buildings become the only ones covered by the limits on rent increases. These older apartments tend to have greater maintenance needs, but since property owners are prohibited from raising rents above the limits imposed by the law, they are forced to reduce maintenance to the point that basic upkeep may not occur unless there is a serious code violation.