Rent Controlled Apartment Definition

Rent control is a government regulation of how rents are set and changed for rental property. It is most often associated with residential units and often includes other related controls such as those affecting evictions. A Swedish study on rent control notes that as of 2003, as much as 40 to 50 percent of the world's urban population lived in rent-controlled housing. In the United States, the authority to control rent rests with the states; however, specific rent controls are implemented at the local level.

History

• During World War II President Franklin D. Roosevelt signed the Emergency Price Control Act into law to prevent the effects of wartime inflation from harming the economy. Rents were included in these controls. The act expired in 1947 but material and labor shortages during the war had resulted in a housing shortage as soldiers returned from abroad. As a result, Congress passed the Housing and Rent Act in the same year. Only housing units built after that year were exempt from the controls. A subsequent amendment to the act authorized states to continue, modify or eliminate the controls at the state level in 1950. New York City was the among the first locations to actively incorporate and modify the regulations to suit its needs.

Geography

• According to the National Multi Housing Council, rent control is pre-empted by state law in 35 states; another 11 states can but do not have any rent control. California and New Jersey each have many cities with rent control regulation; the District of Columbia, Maryland and New York have at least one city with rent control. New York City's law are the oldest.

Variations

• Every rent control ordinance is different. Some apply to housing built before a certain date. Some include vacancy decontrol, which means that when a unit is vacated the rent charged for the unit to the next tenant can come up to market rate. Many rent control ordinances that include vacancy decontrol prohibit eviction without just cause, such as nonpayment of rent. This is because landlords could otherwise evict tenants who had low rents in order to raise the unit rent after the vacancy.

Advantages

• Rent control helps maintain housing affordability to those tenants who have lived in rent-controlled apartments for a long time and for all rent-controlled units in cities without vacancy decontrol. Without rent control, seniors on fixed income and low-wage earners might not be able to reside in cities where they grew up or where they work.

Disadvantages

• Because rent control applies to units and buildings instead of people, the benefits accrue unevenly. A wealthy entrepreneur who happens to maintain an apartment in the city in addition to owning a mansion in the suburbs might benefit from rent control and thereby prevent a middle-income or low-income person from living in the city if the housing market is tight and vacancy decontrol makes available units unaffordable. In cities where new housing is not exempt from rent control, the regulation might discourage new housing construction, thus limiting housing supply and putting upward market pressures on the rents for decontrolled units.