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Home Renting: Rent Control

Rent Control refers to laws or ordinances that set price controls on residential housing. It functions as a price ceiling.

In some regions rent control laws are more commonly adopted for mobile home parks (sometimes called trailer parks or manufactured home communities). Reasons given for these laws include residents owning their homes (and renting the land), the high cost of moving "mobile" homes and the loss of home value when they are moved. While California, for example, has only 13 local apartment rent control laws it also has over 100 local mobile home rent control laws.

Proponents of rent control claim that it is necessary to prevent greedy landlords from imposing rent increases that force the elderly and the poor to move. Some proponents make the argument that housing is an inalienable human right and that it should equal the rights of landlords. Other advocates claim that maintaining a supply of affordable housing is essential to sustaining job growth, and to maintaining a community that includes senior citizens and people of all income groups. Homeowners who support rent control point to the neighborhood instability caused by high or frequent rent increases and the effect on schools, youth groups and community organizations when tenants move more frequently.

Opponents of rent control claim that rent control can create housing shortages, results in an overall decrease in the quality of housing stock in a city, and that its benefits accrue disproportionately to the wealthy and well-connected. They argue that the goal of making housing affordable and available to the poor can be accomplished by the same free market that created the affordable units in the first place or by government construction or subsidy.

Opponents of rent control see rent control as a violation of their property rights since they are told what they may and may not do with their property. Some opponents believe that rent control also limits their ability to sell their rent controlled property, thus essentially forcing them to put their property to work for the state without recourse. Regulation of real and other property is, however, a fact of life in modern societies. Landlords and their organizations actively use their recourse to legislatures, initiative processes and the courts to affect what regulations are in place. In particular, many legal challenges to American rent controls are based on arguments that the government has taken landlord's property without compensation. In general the courts have found that this has not happened.

While the political debate over rent control is far-reaching, the purposes and provisions of such laws are intended to be limited in scope. They define which rental units are affected, and may have only larger or older rental complexes covered by the law. The frequency and degree of rent increases are limited, usually to the rate of inflation defined by the Consumer Price Index or to a fraction thereof. (San Francisco, for example, allows annual rent increases of %60 of the CPI.) Unregulated rent increases may be allowed when a tenant moves ("vacancy decontrol"). Some rent boards also allow landlords to pass along the costs of capital improvements to their properties. Tenants may be able to claim that decreased services or the lack of necessary repairs offset such additional increases or justify a rent reduction. Landlords may be required to register current rent levels or provide other information on rent increases and/or terminations of tenancy. Since rent control laws vary considerably from jurisdiction to jurisdiction, landlords and tenants who may be affected should contact their local jurisdiction to obtain information on which law, if any, which applies to them.

Src: http://en.wikipedia.org