The Argument Against Rent Control

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The Argument Against Rent Control

Staff Writer · Apr 7, 2010

Rent control laws are a set of rules that that regulate or prohibit a landlord from raising rents. While a seemingly good means of governing landlords and maintaining affordable housing, rent control is not a universally supported concept. Those who disagree with rent control point to several different reasons for their opposition.

Rent Control Defined, Distinguished and Located

A landlord of a rent controlled apartment is prohibited from raising rents beyond a prescribed amount. This means that there is a price ceiling for rent on that specific apartment. Rent control typically applies only to residential properties. Specific rent control guidelines are set by the state or county if the state legislature has provided the county with authority.

The terms rent stabilized and rent controlled are sometimes used interchangeably combined into the term “rent regulation.” The two terms, however, are very different. A rent stabilized apartment is governed by a different set of regulations than those regulating an apartment with rent control. Rent stabilization rules stipulate grounds for eviction, required repairs and rent increases. A rent controlled apartment must have been built prior to February 1947. There are vastly fewer rent controlled than rent stabilized apartments.

Rent control is not in effect everywhere. States such as Illinois, Colorado and Texas have preemptively prohibited rent control laws. Check with your state’s realtor’s association to see if rent control is available in your location.

Economic Arguments Against Rent Control

Critics of rent control argue that the laws protect old residents at the expense of new residents. They contend that because the government imposes a price ceiling on the apartment the quantity and quality of available housing declines. Low prices increases the demand for housing, meaning that there are less housing options for those with limited incomes. Additionally, maintaining low prices in one section of housing typically means increased prices for housing in the surrounding or other areas. By lowering rents on some units or forcing landlords to maintain renting units a small or no profit, landlords will recoup profits on newly vacated units, charging more to new tenants.

However, rent control opponents state that the biggest problem caused by the laws is urban blight. Low rents mean less profits for landlords, owners and builders, which can decrease the latter’s willingness to appropriately maintain current buildings or build new buildings. Often, this leads to existing buildings falling into disrepair and possibly eventual abandonment and little to no revitalization in areas where profits are smaller.

Social Arguments Against Rent Control

Rent control opponents also argue that the laws affect social mobility and integration. By requiring lower rents on certain apartments or buildings, lower-income individuals are often prevented from moving to other areas. Typically, these individuals are minorities. The effect of this limitation is to cloister minorities together, segregating them from the rest of the population.

Furthermore, opponents argue that rent control creates an imbalance between landlords and tenants, with tenants receiving the bad end of the bargain. Because landlords cannot charge higher rents on their property, there is less incentive for repairs and updates. Tenants are therefore left with no remedy but to sue the landlord for resolution, leading to increased tension, judicial action and costs. Similarly, new tenants may be subject to landlord vindictiveness by landlords requiring unreasonable or numerous conditions prior to renting a rent controlled apartment.

Rent control is a controversial topic that requires thorough research prior to shopping or signing a lease for an apartment. Should you find a rent controlled apartment, investigate the surrounding neighborhood for safety and cleanliness and, if possible, speak with current residents about the landlord’s reliability.

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