As rental rates rise in markets around the country, one of the most well-known discussion topics is rent control. Rent control usually goes together with sharp increases in housing prices, a shortage of affordable rentals, or both. From a tenant’s outlook, the thought of freezing or putting a cap on how much rent they pay may seem interesting. What is rent control, which cities have it, and how does it affect Greeley rental property owners and landlords? These are considerations that all rental property owners need to know the answers to in order to take an educated stance.
What is Rent Control?
By definition, rent control laws are government regulations that limit how much a rental property owner or landlord can charge to lease a home. The major goal behind rent control is to make living costs reasonable for a particular city or state’s population, especially lower-income residents.
Who Has Rent Control?
Rent control has been around for quite a while, starting in the 1920s and seeing a resurgence in the 1970s. One of the most consistent and interesting examples of rent control in action is New York City, which has two distinct rent control programs dating from the early 70s. The first program is only offered to renters who have resided in their rental homes since 1971, and the other restricts the number of times rents can be increased. This second regulation applies to about half of the rentals in the city. However, critics argue that the high cost of rent in New York City (rent is typically close to $3,000 a month for a small apartment) is proof that rent control doesn’t work.
Pros and Cons for Landlords
These days, around 180 municipalities in the U.S. currently have rent control regulations, including but not limited to New York, New Jersey, California, Maryland, Oregon, and Washington, D.C. Every city has a different approach to rent control, from capping rental rates to limiting increases and paying a renter to move. However, there are several other areas where the merits of rent control laws are being debated.
From a landlord’s perspective, the advantages of rent control focus around tenant turnover and decreasing competition in the rental market. For instance, if a renter sees that their rent will remain the same for a given period, they are much more likely to live in their rental home long-term. This can help minimize the turnover costs for property owners. Rent control also tends to prevent the progress of multifamily rental units in certain areas, which could help existing rental property owners. Without the competition of new apartments in the area, single-family rental property owners may think it is simpler to discover and keep tenants for their rentals.
Unquestionably, these benefits include a list of downsides for landlords, as well. For instance, by enforcing limits on rent increases or rental rates, rent control laws may prevent property owners from maximizing their profit potential. Another potential difficulty for rent control is that bad tenants won’t want to move. If they are troublesome but not quite in violation of their lease, this could result in long-term misery coping with them month after month. Irrespective of whether they have clear lease violations, a lengthy eviction process is much more possible if a tenant decides not to move.
The incapability to raise rents could make it very hard for property owners to meet rising expenses, like property taxes or insurance. Critics argue that such problems are commonly not taken into account when cities begin thinking about passing rent control laws.
Whether your rental properties are subject to rent control laws or not, you can rely on Real Property Management of the Rockies to assist you in maintaining your rental income competitive and profitable. To learn more about what we have to offer, contact us online today!
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