The Pros And Cons Of Rent Control For Landlords And Tenants

While rent control appears to help housing providers in the short run, in the long run it affects their investment and development plans, according to new research by the National Apartment Association (NAA). Potential actions include reducing investments, shifting plans to other markets and canceling plans altogether. Furthermore, a full two-thirds of housing providers would not consider investing in markets with strict rent control policies.

“Rent control” is a loose term used to cover a spectrum of rent regulations, according to the Urban Institute. These regulations can vary from hard caps on maximum rents (often associated with traditional rent control) to limits on the amount that rent can increase over time.

Rent control has a long and hotly debated history. Although rent control has been shown to increase stability and affordability for tenants in controlled units, some studies have found that these benefits are offset by greater costs in the uncontrolled rental market because of reductions in the overall supply of rental units. Even still, many tenants, tenants’ rights groups, and community organizers support rent control and believe in its ability to balance power between renters and landlords. As such, rent control has reemerged as a potential tool to address the housing affordability crisis in the U.S.

Because rent stabilization is not means-tested, it subsidizes the rents of high five-figure and six-figure-income households, rather than the poor and low-income renters it is intended to help, according to a spokesperson for the plaintiffs in the country’s leading lawsuit on rent regulations, which include the Community Housing Improvement Program, the Rent Stabilization Association of NYC and other small property owners. Rent stabilization also has the opposite effect on affordable housing. It limits new supply and prohibits owners from maintaining and updating quality affordable housing.

Different groups of stakeholders have diverging views on the efficacy of rent control in promoting equitable housing outcomes. While landlords, for-profit developers and real estate industry representatives are skeptical of rent control’s ability to provide affordable housing for renters with low incomes and renters of color, many tenant advocates and housing policy researchers disagree and feel that policy loopholes or weak regulatory coverage is to blame when rent control fails to improve housing affordability.