Rent Control Passed in Oregon. Will it Work as a Housing-Crisis Solution Nationwide?
For the first time in decades, rent control is under serious consideration by lawmakers across the country. According to a report published last week by advocacy groups Center for Popular Democracy, Right To The City Alliance, and PolicyLink, if rent-control measures pass in all of the states and cities where they’re currently on the table, nearly a third of all renter households in the United States could secure relief from the worst of the housing crisis.
Currently, only four states in the country have rent-controlled units anywhere within their bounds (California, Maryland, New York, and New Jersey—in addition to Washington, D.C.). Thirty-seven have laws actively prohibiting or preempting localities from enacting it. This wasn’t always the case: Responding to mounting real-estate industry pushback, many states adopted such legislation in the 1980s and ’90s, driving the expansion of rent control to a halt. But as rising housing prices continue to send an increasing number of families into instability, poverty, and homelessness, and as nearly half of all renters in the U.S. meet the government‘s standard of cost-burdened according to the Joint Center for Housing Studies at Harvard University, states and cities are once again looking to the policy as the most effective short-term solution to the crisis.
Rent-control advocates across the country are clear that the policy is not the only solution to the housing crisis, nor necessarily the most effective: Locking in rents that are already severely unaffordable may not provide housing security for the lowest-income renters. But the report argues that it is the most efficient affordable housing solution.
In cities where it exists already, rent control is the largest source of affordable housing, the report shows. In San Francisco, rent control stabilizes 173,000 units, three times more than all other affordable housing combined. In New York City, twice as many low-income families live in rent-regulated apartments than in public and subsidized housing.
There’s evidence from the U.S.’s first major rent control experiment of the policy’s ability to provide affordable housing quickly in times of crisis. In the years after Santa Monica, California, adopted rent stabilization in 1979, the proportion of tenants living for more than five years in the same units doubled, while gentrification slowed and the exodus of lower income households and families with children halted.
Rent control has also been, historically, the cheapest option to provide affordable housing: in 2013, Berkeley stabilized 19,000 units for only $4 million, compared with the $20 million it would have cost to provide vouchers to the city’s 2,200 lowest-income renter households, or the $220 million it would have cost to build or rehabilitate 2,200 affordable units. With the Department of Housing and Urban Development crippled by budget cuts, quicker, cheaper fixes are an increasingly crucial stopgap.
“In the face of our renter crisis, we need immediate solutions with immediate benefits for low-income renters facing this crisis of affordability, stability, displacement, eviction,” says Sarah Treuhaft, one of the authors of the report and managing director of PolicyLink. “There’s really no comparison [with rent control] in terms of the scale and breadth compared with other policies.”
Rent control promises to be particularly effective for the country’s most vulnerable renters: Out of the 12.7 million households that would be stabilized if rent control passes in the places currently considering it, 75% are low- or moderate- income. It would also disproportionately benefit Black and Latino renters, who are more likely to be cost-burdened than white renters.
The report systematically combats industry groups’ arsenal of anti-rent control talking points. To the claim that rent control stunts housing development, it offers longitudinal studies of rent control in New Jersey where the policy had no impact on construction rates, and in Boston, where construction rates decreased for multifamily buildings after rent control was repealed. The argument that rent control causes rents to increase in non-regulated units has also been proven false: in Massachusetts (before the repeal), California, and New Jersey, rent control had no effect on non-regulated units prices, or even slightly increased affordability.
The national mood on rent control is shifting quickly, led by Oregon. Just last week, the state became the first in the country to adopt mandatory statewide rent control, limiting yearly rent increases to 7 percent and banning no-cause evictions. Across the state, median rent has increased rapidly in recent years, pushing the state into second place in the country for homelessness. One organizer with the Community Alliance of Tenants, a grassroots tenants advocacy group, Jesse Sharpe, saw the monthly rent on his two-bedroom apartment in Ashland jump three times in one year, for a more than 36 percent total increase. Sharpe soon learned that the largest property owner in southern Oregon had purchased his building, along with the other six apartment complexes on his street, and launched a massive rent hike on all of them.
Oregon’s policy was resisted vigorously by the state’s real estate lobby: A 2017 version of the bill died in the Senate after an industry group, More Housing Now!, spent $1 million to oppose it. But according to Pamela Phan, another organizer with CAT, the policy had gained increasing support as the renter crisis worsened. “We’re two years deeper into a crisis that has so many more casualties than before. We’ve seen communities where it doesn’t matter what party you’re in—essentially, if you’re a renter you have instability and insecurity,” she says. “So, legislators are looking at the impacts and saying, ‘We can’t just call these externalities to the rental housing market anymore.'”
Even so, industry pushback did constrain the scope of the bill: The legislation establishes a rent-increase cap of 7 percent plus inflation, which could still allow for unaffordable rent increases. And, the law only applies to buildings at least 15 years old and kicks in after tenants have lived in their home for a year. Even so, according to the report, the policy will stabilize almost half a million of the state’s 1.6 million renter households. Well over half of those who will benefit from the legislation are low-income, according to the report’s estimates.
Rent-control efforts are being put to a vote elsewhere, too. Last week in Chicago, voters in four wards in the Northwest Side voted to eliminate Illinois‘ statewide ban on rent control, adding to the chorus of support demonstrated in two elections last year in other parts of the city. The report estimates that over 1.5 million renter households would be stabilized in Illinois if the state implemented rent control on a statewide basis, as one bill under consideration would entail.
There are also currently ongoing movements to introduce rent control in Colorado, Philadelphia, and Providence, Rhode Island, and to strengthen and expand rent control in California and New York.
“We’re moving into a new era with a new social contract,” says Phan, “in which tenants are going to be actually present in legislation.”