Rent control

Extracted Attributes

• Definition

  A system of laws for the rental market of dwellings, encompassing price controls, eviction controls, and property maintenance obligations.

• Primary Goal

  Improve housing affordability

• Tenant Impact

  Predictable housing costs, increased stability of tenure, less likely to move, lower rents in controlled units

• Landlord Impact

  May convert rental properties to condominiums, reduce property maintenance, diminished property values

• Types of Rent Control

  Vacancy control (rent level controlled irrespective of tenant), Vacancy decontrol (rent level controlled only while existing tenant remains, often called rent stabilization)

• Unintended Consequences

  Housing shortages, increased rents for uncontrolled dwellings, reduced residential mobility

• Geographic Presence (2016)

  At least 14 OECD countries and 4 U.S. states

• Economic Consensus on Effects

  Reduces the quality and quantity of housing units

Timeline

• During World War I, rents in the United States were 'controlled' through public pressure and local anti-rent-profiteering committees. (Source: Web Search)

  1910s

• A number of cities and states in the United States adopted rent- and eviction-control laws. (Source: Web Search)

  1919-1924

• Modern rent controls were first adopted in response to the Great Depression and World War II-era housing shortages and national economic crisis. (Source: Web Search)

  1930s-1940s

• Rent control existed in Massachusetts before being repealed by ballot initiative. (Source: Web Search)

  1970-1994

• San Francisco imposed rent control on all standing buildings with five or more apartments. (Source: Web Search)

  1979-XX-XX

• A local San Francisco ballot initiative expanded rent control. (Source: Web Search)

  1994-XX-XX

• California's Costa/Hawkins bill phased out vacancy control provisions. (Source: Web Search)

  1997-XX-XX

• At least 14 of the 36 OECD countries and four states in the United States had some form of rent control in effect. (Source: Wikipedia, Provided Summary)

  2016-XX-XX

Rent regulation

Rent regulation is a system of laws for the rental market of dwellings, with controversial effects on affordability of housing and tenancies. Generally, a system of rent regulation involves: Price controls, limits on the rent that a landlord may charge, typically called rent control or rent stabilization Eviction controls: codified standards by which a landlord may terminate a tenancy Obligations on the landlord or tenant regarding adequate maintenance of the property A system of oversight and enforcement by an independent regulator and ombudsman The term "rent control" covers a spectrum of regulation which can vary from setting the absolute amount of rent that can be charged, with no allowed increases, to placing different limits on the amount that rent can increase; these restrictions may continue between tenancies, or may be applied only within the duration of a tenancy. As of 2016, at least 14 of the 36 OECD countries have some form of rent control in effect, including four states in the United States. Rent regulation is implemented in many diverse forms. It is one of several classes of policies intended to improve housing affordability. However, there is consensus among economists that rent control reduces the quality and quantity of housing units.

Web Search Results

• How Rent Control Affects the Housing Market | Real Estate | U.S. News

  Rent control provides tenants with a predictable housing cost, helping them stay in one place longer and ideally save money. When a lease is renewed, tenants know how much their rent can increase. In theory, that stability allows for more discretionary spending and saving, especially if their income rises. [...] Rent control is a government-imposed law that caps or regulates how much a landlord can increase rent during a lease renewal or after a vacancy. Also called rent stabilization or a rent cap, it has specific guidelines a landlord must follow when increasing rent on a rent-stabilized property. [...] Rent control is a controversial topic among local governments. In recent years, many cities and states have added rent control measures to the ballot as a response to rising housing costs. “Some understand the implications of rent control but still feel it’s worth it to provide more affordable housing to people,” says Nix. Others oppose it, he adds, due to the long-term restrictions and unintended effects on the housing market.

• Rent control in the United States - Wikipedia

  Historically, there have been two types of rent control – vacancy control (where the rent level of a unit is controlled irrespective of whether the tenant remains in the unit or not) and vacancy decontrol (where the rent level is controlled only while the existing tenant remains in the unit). In California prior to 1997, both types were allowed (the Costa/Hawkins bill of that year phased out vacancy control provisions). A 1990 study of Santa Monica, CA showed that vacancy control in that city [...] In the United States during World War I, rents were "controlled" through a combination of public pressure and the efforts of local anti-rent-profiteering committees. Between 1919 and 1924, a number of cities and states adopted rent- and eviction-control laws. Modern rent controls were first adopted in response to the Great Depression and WWII- era shortages. Because of these shortages and the overall national economic crisis, the federal government called for emergency price control on consumer [...] Rent control existed in Massachusetts between 1970 and 1994 when it was repealed by ballot initiative. According to the National Bureau of Economic Research, the number of rental units was reduced by 15% and tenants were 8-9% less likely to move due to rent control. Tenants paid 40% below market rates on their units, and the value of properties was diminished by 45%.

• A Comprehensive Study of Rent Control - California YIMBY

  Rent control’s effects on geographic and economic mobility are similarly clear, and near-universally found to be negative, for two main reasons. First, because moving would likely increase their housing costs, rent-controlled tenants have a financial disincentive to relocate in response to changing housing needs or job opportunities. Second, rent regulation provides heightened stability of tenure, which reduces the likelihood of eviction. [...] Rent control effectively caps rents within controlled dwellings, but the extent of its impact varies across countries and research methodologies. Housing shortages, increased rents for uncontrolled dwellings, and reduced residential mobility emerge as unintended consequences of rent control. Rent control negatively affects housing quality, and its impact on homeownership trends varies, with conflicting results from different studies. [...] The most significant effect of rent control is, unsurprisingly, on the rents people pay: the overwhelming majority of studies find that tenants in rent-controlled units pay lower rents than they otherwise would have, while renters in uncontrolled dwellings pay higher rents and spend more time looking for housing.

• [PDF] The Economics of Residential Rent Control ››

  called “vacancy decontrol.” A cap on rent increases starts up again at the start of a new tenancy. (This type of system is often called “rent stabiliza­ tion” in contrast with stronger “rent control.”) Since these systems can be evaded by evicting long-term tenants, they are normally accompanied by a require­ ment that landlords show “good cause” for evictions. Landlords faced with a combination of rent control, vacancy decontrol, and good cause for eviction requirements may become less [...] Rent control, in its various forms, reduces the hardships caused by rent increases that result from a scarcity of older housing. It provides an alterna­ tive method of rationing access, giving priority to security of tenure and stability rather than to who­ ever has the most money. Modern rent-control sys­ tems in the United States exempt new construc­ tion, which makes sense because that is the sector of the rental housing market in which price increases will generate additional supply. This [...] Effective Rent control needs companion policies because land­ lords will work to evade regulation by finding other more profitable ways to use the rental housing under their control. A frequent finding in studies of rent control is that some landlords will convert their rental properties to condominiums and sell them to owner-occupants, thus reducing the overall stock of rental housing. Local governments have control over condominium conversion and often ban this Rent control needs companion

• What does economic evidence tell us about the effects of rent control?

  A substantial body of economic research has used theoretical arguments to highlight the potential negative efficiency consequences to keeping rents below market rates, going back to Friedman and Stigler (1946). They argued that a cap on rents would lead landlords to sell their rental properties to owner occupants so that landlords could still earn the market price for their real estate. Rent control can also lead to “mis-match” between tenants and rental units. Once a tenant has secured a [...] Diamond, McQuade, and Qian (2018) (DMQ) examine the consequences of an expansion of rent control on renters, landlords, and the housing market that resulted from a unique 1994 local San Francisco ballot initiative. In 1979, San Francisco imposed rent control on all standing buildings with five or more apartments. Rent control in San Francisco consists of regulated rent increases, linked to the CPI, within a tenancy, but no price regulation between tenants. New construction was exempt from rent [...] Autor, Palmer, and Pathak (2014) (APP), studies the impact of this unexpected change and find that newly decontrolled properties’ market values increased by 45 percent. In addition to these direct effects of rent decontrol, APP find removing rent control has substantial indirect effects on neighboring properties, boosting their values too. Post-decontrol price appreciation was significantly greater at properties that had a larger fraction of formerly controlled neighbors: residential

• Instance Of

  Q4167410