Will Statewide Rent Control Catch On Beyond Oregon?

It's the first in the nation to pass a rent control law that covers tenants across an entire state.
by | March 4, 2019 AT 2:07 PM
Protesters hold signs.
Supporters of rent control demonstrate on the Capitol steps in Salem, Ore. (AP/Andrew Selsky)

SPEED READ:

  • Oregon is the first state to adopt statewide rent control regulations.
  • Support for rent control is building in Colorado, Illinois and New York.
  • While the U.S. median household income has remained relatively flat since 2001, the median rent has shot up by more than 40 percent, according to a new report from PolicyLink.
 

Oregon made history last week when Democratic Gov. Kate Brown signed rent control regulations for tenants across the entire state. It's the first state to mandate this kind of policy, which is usually regulated at the local level.

Under the new law, rent increases will be capped at 7 percent a year, plus the rate of inflation. Landlords will be required to cite the reason for an eviction, and in certain eviction cases, must give tenants 90-day notice and pay tenants one month’s rent.

Oregon state Sen. Shemia Fagan, a Democrat, called the legislation “an incredibly big first step” toward improving the lives of tenants.

Affordable housing -- or lack thereof -- isn't an issue confined to Oregon. While the U.S. median household income has remained relatively flat since 2001, the median rent has shot up by more than 40 percent in the same time period, according to a new report from PolicyLink, a research organization that advocates for economic and racial equity.

Oregon is the first to adopt statewide rent controls, but it may not be the last. Support for some form of state-level rent control is building in Colorado, Illinois and New York.

 

New York

In New York, lawmakers are backing a package of rent reform bills that would, among other things, expand rent control regulations and renter's rights. The package comes in a year when Democrats have taken control of the state Senate for the first time in decades.

“[Midterm] voters responded pretty forcefully to a message about expanding our affordable housing and protections, so I think we should fight for that,” state Sen. Zellnor Myrie, a Brooklyn Democrat elected to office in November, told the real-estate publication Commercial Observer. “I think we’re at crisis levels, and we need a crisis response.”

The state currently has rent control guildelines that some municipalities and counties can choose to opt in or out of. Of the nearly 1,000 towns and cities in New York, 51 are allowed to place some portion of their housing stock under rent control. The proposal would allow all municipalities to opt in to rent control regulations. 

Ulster County, about 90 miles north of New York City, is one of the places that doesn't follow the state's guidelines. Juanita Armador, who represents tenants in the Ulster’s county seat as a member of the Kingston Tenants Union, witnesses the impact firsthand. Developers are turning what was modestly priced housing stock into luxury rentals to attract people from the New York City area who are being priced out. The ripple effect is that more residents in Kingston are being priced out.

“Our rents are going up so high above market rate that people can’t afford to live here,” Armador says. “It’s hard to tell your child the home that they considered theirs is no longer theirs.”

 

Illinois

Voters in Chicago have on more than one occassion -- as recently as last week -- supported a resolution urging the state to end its 22-year-old ban on rent control. Democratic state Rep. Mary Flowers introduced a bill to repeal the ban and carve the state into six regional rent control boards.

Local activists are optimistic about the bill's passage and the prospect that Gov. J.B. Pritzker would sign it because the Democrat campaigned in support of lifting the ban.

Housing advocates say Illinois renters are facing a rental crisis that needs to be addressed.

“A quarter of Illinois’ population is paying more than 50 percent of their income on just rent,” says Jawanza Malone, a housing advocate with the Chicago-based Kenwood-Oakland Community Organization. (The recommended rent-to-income ratio is 30 percent.)

Removing the ban on rent control would have a dramatic impact on Illinois’ black population. According to data collected by Governing, nearly two-thirds, or 62 percent, of black residents in the state are renters, compared to 27 percent of white residents.

 

Colorado 

Meanwhile, Colorado is looking to overturn a three-decade-old law that bans cities from enacting rent control.

State Sen. Julie Gonzalez, a Democrat, is working on a bill to do as much. She has the support of a new class of Democrats in the statehouse and municipal leaders in Denver.

"I think that municipalities should have a full set of policy options to decide what makes the most sense for them," Gonzalez told Colorado Public Radio  

 

Is Rent Control Really the Solution?

Questions about whether rent control is effective persist. Research on the subject has produced contrasting results.

According to a 2018 Stanford University study of San Francisco, the benefits of rent control were limited to people who lived in rent-controlled units. Meanwhile, landlords raised rents on their non-rent-controlled units, leading to an overall 5 percent reduction in the number of rental units and an overall 5 percent increase in rental prices.

Some, however, question whether San Francisco was the appropriate setting to examine the impact of rent control. The University of Southern California (USC) conducted a follow-up study, which concluded that, "There have been so many pressures driving up rents in San Francisco in recent years that one concern is whether the increase in rent costs the authors found due to rent stabilization would have actually been outpaced by what might have emerged had rent hikes been completely unrestricted,” wrote USC researchers.

Furthermore, San Francisco's rent controls don't apply to units built after 1980. The Oregon law similarly exempts buildings that are less than 15 years old.

PolicyLink argues that rent control is the quickest and most efficient way to remedy affordable housing issues. The key is broader enforcement -- regulating as many units, including single-family homes put on the rental market, as possible.

Still, the research has made some voters and lawmakers hesitant. California voters rejected a November ballot measure that would have repealed a 23-year-old state law that limits the cities' power to enact rent control. In Washington state, an effort to repeal the state's ban on rent control died in committee last year.

 

*CORRECTION: A previous version of this falsely stated that Oregon's rent control regulations will apply to all rental units. It in fact exempts buildings that are less than 15 years old.