Rent regulation policies

Rent regulation policies with income eligibility requirements are a suggested strategy to improve housing stability^{1, 2, 4}, reduce displacement^{2, 4, 5, 6} and evictions^{7, 8}, provide affordable housing for tenants with low incomes^{2, 6}, and support economic diversity in hot real estate markets². Available evidence suggests that rent regulation policies increase neighborhood stability¹. Experts suggest that combining rent regulations with robust efforts to promote affordable housing, offer job training opportunities, and implement economic development plans may be needed to address severe housing insecurity¹. Additional research is needed to confirm effects and determine which aspects of rent regulation policies are most effective⁶.

An evaluation of the repeal of rent control in Cambridge, Massachusetts, indicates increases in property values, condo conversions, rent for units that were regulated and unregulated, as well as substantial tenant turnover following the policy change⁹. The neighborhood gentrification that followed the repeal of rent control increased landlord revenue and displaced existing tenants¹. In New York City, studies also suggest de-regulating rent stabilized units contributes to tenant displacement¹⁰. In cities with high costs of living, private equity owners with high expectations of financial returns often replace local, independent landlords, which can exacerbate tenant displacement. Legal-financial practices such as rent regulation policies are suggested to help redefine property owners’ financial expectations¹¹.

Cities with strong tenant protection laws, including rent regulation policies and eviction protections, have lower eviction rates than cities without such policies⁸. A Washington, D.C.-based report suggests rent stabilization programs reduce displacement and improve housing stability, especially for residents of color; this report also suggests that converting a relatively small percentage of existing rent regulated units into affordable housing units has the potential to increase economic diversity in neighborhoods across the city, without needing to find locations for and then build new affordable housing projects⁵. Rent regulation policies can be designed to protect populations who are vulnerable and housing insecure such as those in extreme poverty and families with children and low incomes⁷. New York City’s Senior Citizens Rent Increase Exemption program (SCRIE), which provides rent increase exemptions for tenants of rent regulated housing who are older adults with low incomes or with disabilities, is an example of such an approach².

Available evidence suggests that rent regulation may reduce maintenance efforts or encourage condo conversions as rent increases may not cover maintenance or operational cost increases but does not suggest a negative effect on new construction^{1, 6}. Rent regulation can benefit landlords, especially those who are local and independent, by minimizing tenant turnover and reducing transaction costs¹². Experts suggest that rent regulation balances the interests of landlords and tenants⁷.

One expert suggests that rent control policies could be applied only to absentee landlords in blighted, inner city neighborhoods in order to attract resident landlords, increasing economic diversity and supporting neighborhood stabilization. Such a policy would need to be designed carefully to avoid oversaturating the market with buildings for sale¹³.

California, Maryland, New Jersey, and New York have rent regulation laws as of 2019. New Jersey has rent control regulations in about 120 jurisdictions; the other three states have regulations covering a few jurisdictions. Thirty-seven states currently prohibit or preempt rent regulation; nine states (Alaska, Hawaii, Maine, Montana, Nevada, Ohio, Pennsylvania, Rhode Island, and West Virginia) have no laws that address rent regulation. As of 2019, legislatures in four states (Colorado, Illinois, Oregon, and Washington) are considering legislation to remove prohibitions on rent control. Oregon was the first state to adopt statewide rent regulation policies¹⁴, followed by California¹⁵. Similar policies are proposed in Illinois and Washington, and Colorado plans to repeal its statewide ban, allowing local rent regulation policies¹⁶.

Several U.S. cities have rent regulation policies in place, for example, Washington, D.C.¹⁷, New York City¹⁸, San Francisco¹⁹, and Newark, NJ²⁰. Moderate rent stabilization policies in Berkeley, CA have successfully provided roughly 75% of tenants with protection against future displacement; similar policies can be found in Los Angeles, Oakland, San Francisco, and San Jose²¹. In New York City in 2011, there were nearly one million rent stabilized housing units, roughly 45% of the city’s rental housing stock, and roughly 66% of tenants living in rent-stabilized units were considered low income²².

Rent regulation policies exist in various forms in many other countries around the world; Ireland and Belgium are two countries that have rent regulation policies with income eligibility requirements¹².

PolicyLink-Chew 2019 - Chew A, Treuhaft S. Our homes, our future: How rent control can build stable, healthy communities. PolicyLink, Right to the City, The Center for Popular Democracy. February, 2019.

LHS^‡ - Local Housing Solutions (LHS). To enhance local affordability and foster inclusive communities. New York University, Furman Center and Abt Associates, Inc.

Furman Center-Affordable housing - Furman Center for Real Estate and Urban Policy. Research area: Affordable & subsidized housing. New York University, Furman Center.