As rental rates rise in markets around the country, one of the most noticeable discussion topics is that of rent control. Rent control commonly comes with sharp increases in housing prices, a shortage of affordable rentals, or both. From a tenant’s evaluation, the impression of freezing or putting a cap on how much rent they pay may seem beneficial. What is rent control, which cities have it, and how does it affect North Hollywood rental property owners and landlords? These are concerns that all rental property owners need to know the answers to in order to take an educated stance.
What is Rent Control?
By classification, rent control laws are government regulations that limit how much a rental property owner or landlord can charge to lease a home. The primary objective behind rent control is to make living costs low for a particular city or state’s population, especially lower-income residents.
Who Has Rent Control?
Rent control has been present for a long time, starting in the 1920s and seeing a comeback in the 1970s. One of the most consistent and interesting cases of rent control in action is New York City, which has two separate rent control programs starting in the early 70s. The first program is only eligible to renters who have chosen to live in their rental homes since 1971, and the other restricts the number of times rents can be increased. This second regulation covers almost half of the rentals in the city. Nevertheless, critics argue that the high cost of rent in New York City (rent is typically close to $3,000 a month for a small apartment) is proof that rent control does not work.
Pros and Cons for Landlords
At present, almost 180 municipalities in the U.S. currently have rent control regulations, including but not limited to New York, New Jersey, California, Maryland, Oregon, and Washington, D.C. Each city offers a unique approach to rent control, from capping rental rates to limiting increases and paying a renter to move. However, the merits of rent control laws are being debated in many other places.
From a landlord’s perspective, the advantages of rent control center on tenant turnover and decreasing competition in the rental market. As an illustration, if a renter is aware that their rent will remain the same for a given period, they are much more interested in staying in their rental home long-term. This can assist in lowering turnover costs for property owners. Rent control also prevents the progress of multifamily rental units in certain areas, which may support existing rental property owners. Without the competition of new apartments in the area, single-family rental property owners may find it easier to attract and retain tenants for their rentals.
Sure thing, these benefits are accompanied by a number of downsides for landlords, as well. For example, by imposing limits on rent increases or rental rates, rent control laws may discourage property owners from maximizing their profit potential. Another possible obstacle to rent control is that bad tenants won’t want to move. If they are bothersome but not quite in violation of their lease, this could bring some long-term misery interacting with them month after month. Even though they have clear lease violations, an extensive eviction process is much more likely if a tenant chooses not to move.
The lack of ability to raise rents may make it very difficult for property owners to meet rising expenses, along with property taxes or insurance. Critics argue that these concerns are commonly not taken into account when cities start considering passing rent control laws.
Whether your rental properties are subject to rent control laws or not, you can trust Real Property Management West San Francisco Valley to help you keep your rental income competitive and profitable. To learn more about what we have to offer, contact us online today!
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