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What Is Rent Control?
At the state and local level, rent control policies are being advertised as a solution to supply and affordability issues. With rent control, the rent charged to a tenant who lives in qualified housing is strictly regulated, with a maximum placed on the amount the landlord may charge the tenant. Therefore, rent control is effectively a price ceiling imposed by the governing entity.
Rent control is a rare instance where the research is conclusive: It doesn’t work.
These measures not only fail to improve most renters’ financial situation, but also shift economic burdens onto the housing provider with no counterbalance. This drives housing providers out of communities, stalls new development, reduces housing supply, lowers property values, and, over time, harms the area’s economy.
The National Association of REALTORS® (NAR) recognizes the need in this nation to produce rental housing and preserve the current rental housing stock.
NAR encourages states and municipalities to adopt zoning laws and building codes, or other legislation that encourage the construction of rental dwellings. NAR opposes moratoria on zoning or approvals for apartments and mobile home parks.
Rent control and rent stabilization are infringements upon private property rights. NAR opposes current and future rent control and rent stabilization laws on both residential and commercial properties. NAR encourages local and state REALTOR® associations to oppose any legislative measure allowing for rent control or rent stabilization efforts.
NAR's Policy on Rent Control
NAR opposes rent control for the following reasons:
- Property owners have the right to set rents at market rate.
- Property owners have the right to own property free of unreasonable controls.
- Rent control and rent stabilization put unreasonable costs and burdens upon property owners without compensation.
- Rent control and rent stabilization create market distortions and allocate housing inefficiently.
- The social responsibility of providing affordable housing should not be disproportionately borne by private property owners.
- Rent control has been shown to be extremely difficult and costly to administer by local governments.
- Lost revenue under rent control measures reduces the ability for the property owner to maintain and improve the property.
- As residential rentals lose value due to the restriction on rents, property tax assessments decrease along with the property tax base. Therefore, other property owners would eventually pay more in taxes or fees as a result.
- Rent control discourages the production of new rental dwellings in the private sector.
In jurisdictions that have rent control, protections should be put in place for property owners, such as:
- Rent controlled or rent stabilized units should be for the exclusive use of those requiring housing assistance. Therefore, tenant finances under the original lease terms shall be verified on an annual basis.
- Rent control shall not apply to new buildings.
- In addition to permitted annual rent increases, rent control laws shall permit the property owner to pass-through increased expenses of maintenance, operation, and taxes to the tenant.
- Rent control shall permit vacancy decontrol with any change of tenancy. Vacancy decontrol allows a property owner to raise rents to market rate when a new tenant signs a lease.
- There shall be no requirement to roll back rent to previous years’ rent rates.
- There shall be an alternative to lease disputes going to court (such as non-binding arbitration).
- Rent control regulatory boards or advisory boards overseeing rent control decisions have an equal representation of owner and tenant members.
