Rent regulation policies

Rent regulation policies affect the landlord-tenant relationship by establishing protections such as limits to the amount landlords can increase rent for existing tenants; such policies also often prohibit landlords from evicting tenants without just cause. Historically, policies used rent control to set price ceilings or strict limits on rent increases. Most current policies regulate markets that otherwise would be too expensive for households with low or moderate incomes using a rent stabilization approach, which provides a moderate return on investment for landlords with annual rent increases that account for the cost of inflation and any property improvements beyond standard maintenance. Current rent regulations vary by scope, standards for permitted rent increases, and enforcement mechanisms (Pastor 2018). Although many current rent regulation policies do not have income eligibility requirements, policies can be adjusted to focus on tenants with low incomes (McPherson 2004*). According to reports from Harvard University’s Joint Center for Housing Studies, as of 2017, over 21 million US households spend more than 30% of their income on rent (JCHS-Rental report 2017).

Expected Beneficial Outcomes (Rated)

  • Increased housing stability
  • Reduced displacement
  • Improved access to affordable housing
  • Reduced evictions
  • Increased neighborhood stability

Evidence of Effectiveness

Rent regulation policies with income eligibility requirements are a suggested strategy to improve housing stability (McPherson 2004*, Furman Center-Yager 2016, Pastor 2018), reduce displacement (DC Policy-Taylor 2020, Urban-Galvez 2017, McPherson 2004*, Furman Center-Yager 2016) and evictions (Rosser 2017, CityLab-Holder 2017), provide affordable housing for tenants with low incomes (McPherson 2004*, Urban-Galvez 2017), and support economic diversity in hot real estate markets (McPherson 2004*). Available evidence suggests that rent regulation policies increase neighborhood stability (Pastor 2018). 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 insecurity (Pastor 2018). Additional research is needed to confirm effects and determine which aspects of rent regulation policies are most effective (Urban-Galvez 2017).

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 change (Autor 2014*). The neighborhood gentrification that followed the repeal of rent control increased landlord revenue and displaced existing tenants (Pastor 2018). In New York City, studies also suggest de-regulating rent stabilized units contributes to tenant displacement (Wyly 2010). 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 expectations (Teresa 2015*).

Cities with strong tenant protection laws, including rent regulation policies and eviction protections, have lower eviction rates than cities without such policies (CityLab-Holder 2017). A Washington, DC-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 projects (DC Policy-Taylor 2020). 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 incomes (Rosser 2017). 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 approach (McPherson 2004*).

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 (Pastor 2018, Urban-Galvez 2017). Rent regulation can benefit landlords, especially those who are local and independent, by minimizing tenant turnover and reducing transaction costs (Haffner 2008*). Experts suggest that rent regulation balances the interests of landlords and tenants (Rosser 2017).

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 sale (Elorza 2007*).

Impact on Disparities

Likely to decrease disparities

Implementation Examples

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 policies (NCSL-Lays 2019), followed by California (CTL-CA 2020 rent control). Similar policies are proposed in Illinois and Washington, and Colorado plans to repeal its statewide ban, allowing local rent regulation policies (PolicyLink-Chew 2019*).

Several US cities have rent regulation policies in place, for example, Washington, DC (DC-Rent regulation), New York City (NYC-Rent regulation), San Francisco (SF-Rent regulation), and Newark, NJ (Newark-Rent control). 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 Jose (Barton 2012*). 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 income (Furman Center-Rent stable).

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 requirements (Haffner 2008*).

Implementation Resources

LHS-COVID-19 response - Local Housing Solutions (LHS), NYU Furman Center, Abt Associates. COVID-19 Housing response plans.

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.

Citations - Evidence

* Journal subscription may be required for access.

McPherson 2004* - McPherson G. It’s the end of the world as we know it (and I feel fine): Rent regulation in New York City and the unanswered questions of market and society. Fordham Law Review. 2004;72(4):1125-1169.

Furman Center-Yager 2016 - Yager J, Herrine L, Mian N. Gentrification response: A survey of strategies to maintain neighborhood economic diversity. New York University, Furman Center; 2016.

Pastor 2018 - Pastor M, Carter V, Abood M. Rent matters: What are the impacts of rent stabilization measures? 2018:1-30.

DC Policy-Taylor 2020 - Taylor YS. Appraising the District’s rentals. D.C. Policy Center; 2020.

Urban-Galvez 2017 - Galvez M, Brennan M, Meixell B, Pendall R. Housing as a safety net ensuring housing security for the most vulnerable. Washington, DC: Urban Institute; 2017.

Rosser 2017 - Rosser E. Exploiting the poor: Housing, markets, and vulnerability. The Yale Law Journal Forum. 2017;126.

CityLab-Holder 2017 - Holder S. Where evictions hurt the most. CityLab; 2017.

Autor 2014* - Autor DH, Palmer C, Pathak PA. Housing market spillovers: Evidence from the end of rent control in Cambridge Massachusetts. Journal of Political Economy. 2014;122(3).

Wyly 2010 - Wyly E, Newman K, Schafran A, Lee E. Displacing New York. Environment and Planning A: Economy and Space. 2010;42(11):2602-2623.

Teresa 2015* - Teresa BF. Managing fictitious capital: The legal geography of investment and political struggle in rental housing in New York City. Environment and Planning A: Economy and Space. 2016;48(3):465-484.

Haffner 2008* - Haffner M, Elsinga M, Hoekstra J. Rent regulation: The balance between private landlords and tenants in six European countries. European Journal of Housing Policy. 2008;8(2):217-233.

Elorza 2007* - Elorza JO. Absentee landlords, rent control and healthy gentrification: Policy proposal to deconcentrate the poor in urban America. Cornell Journal of Law and Public Policy 2007;17(1), 1-74.

Citations - Implementation Examples

* Journal subscription may be required for access.

NCSL-Lays 2019 - Lays J, Hill S. Trends: Housing: Oregon is first to enact statewide rent control protections. National Conference of State Legislatures (NCSL). July/August 2019.

CTL-CA 2020 rent control - California Tenant Law (CTL). California 2020 rent control and eviction protection law: Civil Code 1946.2 and 1947.12 within the Tenant Protection Act of 2019.

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.

DC-Rent regulation - Washington DC, Department of Housing and Community Development. Rent control.

NYC-Rent regulation - New York City (NYC) Rent Guidelines Board. An introduction to the NYC Rent Guidelines Board and the rent stabilization system.

SF-Rent regulation - City and County of San Francisco (SF), Rent Board. Fact sheet 1: General information: The Rent Board is an agency created to administer the San Francisco Residential Rent Stabilization and Arbitration Ordinance (the 'Rent Ordinance').

Newark-Rent control - City of Newark, Economic and Housing Development, Office of Rent Control. Service: Rent control.

Barton 2012* - Barton SE. The city’s wealth and the city’s limits: Progressive housing policy in Berkeley, California, 1976–2011. Journal of Planning History. 2012;11(2):160-178.

Furman Center-Rent stable - Furman Center for Real Estate and Urban Policy. Profile of rent-stabilized units and tenants in New York City. New York University, Furman Center; 2014.

Haffner 2008* - Haffner M, Elsinga M, Hoekstra J. Rent regulation: The balance between private landlords and tenants in six European countries. European Journal of Housing Policy. 2008;8(2):217-233.

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