Rent Control, the United States 1946
Rent Control, the United States 1946
In the United States, rent control refers to laws or ordinances that put price limitations on residential housing rents to serve as a price ceiling. Economists agree that rent regulation reduces the quality and quantity of rental housing units available.
- Rent control, in a broader sense, refers to two forms of price controls: “tight price ceilings,” sometimes known as “rent freeze” systems, and “absolute” or “first generation” rent controls, which allow no rent rises at all (rent is typically frozen at the rate existing when the law was enacted).
- “Vacancy control,” also known as “strict” or “strong” rent control, in which the rental price can rise during a tenancy but remains regulated between tenancies (a new tenant pays nearly the same rent as the previous tenant), and
- “vacancy decontrol,” also known as “tenancy” or “second-generation” rent control, in which the rental price can rise during a tenancy but rents can rise to market rate between tenancies (a new tenant pays nearly the same rent as the previous tenant (new tenants pay market rate rent, but increases are limited as long as they remain).
As of 2019, there are communities in five states (California, New York, New Jersey, Maryland, and Oregon) and the District of Columbia that have some sort of residential rent control (for normal structures, excluding mobile homes). Thirty-seven states prohibit or preclude rent control, whereas eight states enable cities to impose rent control but do not have any cities that have done so.
Rent control generally covers a considerable percentage of a city’s rental stock in rent-controlled areas: In some of the major markets, for example, 45 percent of rental apartments in New York City were either “rent stabilized” or “rent controlled” in 2011. (these are different legal classifications in NYC) In 2014, well over half of rental units in the District of Columbia were rent controlled, in San Francisco, nearly 75 percent of all rental units were rent regulated, and in Los Angeles, 80 percent of multifamily units were rent controlled.
Oregon’s legislature enacted a measure in 2019 that made the state the first in the country to implement a rent control program at the state level. This new law keeps the current state ban on local rent control policies (state level preemption) in place, limits annual rent increases to inflation plus 7%, includes vacancy decontrol (market rate between tenancies), exempts new construction for 15 years, and keeps the current state ban on local rent control policies in place.
SEE ALSO:
Public Purpose and Eminent Domain (2005).
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