You may have heard the term “rent control” but what is it, and what does it mean for renters (and landlords)? Is it a good thing or a bad thing for your Paycheck?
Here are Five Fast Facts on rent control:
- ❓ What Is It? Rent control is basically just a limit on the amount of rent a landlord can charge. It is designed to prevent huge increases in rent particularly for lower income or elderly residents. It's also supposed to protect people in rapidly growing areas that become far more expensive over short periods of time.
- 🤏 How Common Is It? As of 2019, only 182 cities had areas with rent control, and all were in New York, New Jersey, California, or Maryland. Oh, Washington DC also has it. More recently, Minnesota has introduced it, too. So, mostly big coastal cities.
- 👍 What’s Good About It? Supporters of rent control say it slows the rise of rental prices, stabilizes communities, and improves the safety of residents.
- 👎 What’s Bad About It? Opponents of rent control say it reduces the number of rentals on the market because landlords are converting them away from rentals. The reason: rent control makes it harder to turn a profit if you’re a landlord. So, areas with rent control often have lackluster maintenance and little investment in new rental housing in the area.
- 📜 The Big Picture - Currently, 31 states have laws blocking rent control, so there are only about 22k rent-controlled apartments around the country. In most cases, there are requirements about the age of the building, how long residents have lived there, and how much they earn.
🔥Bottom line: Anytime you introduce artificial limits on something people need, you can see strange things in the market prices as a result. Rent control on apartments is no exception. It can be a pretty sweet deal if you’re a renter who likes to fix your own stuff, or if you’ve been living for a long time in an area that has become more expensive around you. For everyone else, it might present some challenges that may or may not make it worthwhile. It can definitely be hard on landlords! It’s not particularly common in our country, but happens enough to make it worth discussing.
What do you think about rent control?
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