Rent Control: Policy Issue

Overview

Rent control, also known as rent stabilization or anti-price gouging laws, are government-enforced limits on rents and rent increases that severely hinder property owners’ ability to effectively manage rental communities for their residents. These laws ultimately exacerbate housing shortages for local communities because they ignore the root cause of affordability challenges: a lack of housing supply at all price points.

Rent Regulation

Industry Position

Rather than improving the availability of much-needed housing, rent control laws worsen shortages, cause existing buildings to deteriorate and disproportionately benefit higher-income households. The National Apartment Association (NAA) opposes rent control in all forms. Lawmakers should instead pursue proven alternatives like voucher-based rental assistance to address renter financial insecurity in the short-term and policies that increase housing supply to support affordability and renter stability long-term.

Decades of empirical research and real-world examples show that rent control worsens the housing crisis by discouraging investment in new construction and results in deferred maintenance of existing rental communities. This happens because housing providers cannot respond to fluctuating market pressures, leading investors to transfer their funding to non-rent-controlled jurisdictions. In practice, this leaves renters to compete for fewer quality housing options.

A survey by the American Economic Association found that 93% of U.S. economists agreed that rent control reduces the quality and quantity of available housing. A comprehensive NAA study of various markets across the country gives us insight into the impact of rent control:

Rent control stifles community development.
- 71% of housing providers have or expect to reduce investment and development in rent-controlled markets by scaling back plans, shifting to other markets, and canceling plans altogether.
Rent control worsens housing affordability for renters.
- 67% of housing providers say they would absolutely not invest in another market with rent control policies.
Rent control devalues rental communities and undermines a renter’s right to quality housing options.
- 61% of housing providers have deferred or expect to defer nonessential maintenance and improvements due to rent control.
Rent control exacerbates inequitable outcomes for renters.
- 58% of housing providers know of higher-income residents who benefit from these policies.

Currently, 32 states recognize rent control’s counterproductive nature and prohibit it outright, preempting local governments from adopting these policies. Moreover, ten states do not impose rent regulations, having no reference to the policy in state or local laws.

Oregon and Washington have rent control statewide but preempt it locally. Six more states plus the District of Columbia have rent control policies in place at the state or local level. Within the minority of states that regulate rents, over 300 city or county councils have created a complex patchwork of local requirements, mostly in California, New Jersey, and New York, which consistently rank as the country’s least affordable.

As an Owner or Operator, How Does this Affect My Business?

Not only do these laws stifle critical housing production, the patchwork of state and local regulations adds complex, duplicative and contradictory requirements to an already overregulated rental housing industry. Each jurisdiction’s rent control regime differs:

Some jurisdictions establish unelected rent control boards to administer the program, funded through burdensome fees on rental property owners. These boards often dictate the rate of allowed rent increases or the exact dollar amount that can be charged for individual apartments.
Some jurisdictions tie rent increases to the inflation rate under the presumption that maintenance and operation costs are correlated to things like food and gas prices. The rent caps often have a hard upper limit, so rents cannot keep pace with rising expenses like insurance, taxes, and mortgage rates.
Some jurisdictions have a lengthy appeals process and require an additional fee if rent must be increased to cover repairs or major capital improvements
Some jurisdictions will exempt “new” construction, wherein units that were built on an arbitrary date will be subject to a two-tiered regulatory regime and those built after will not.
Some jurisdictions maintain a rent cap from one tenancy to the next, known as vacancy control, while also allow for resetting rates upon unit vacancy, often with a different set of restrictions.
Some jurisdictions pair rent control policies with just cause eviction measures or other restrictions that make it even harder for housing providers to effectively manage their rental communities.