As rental rates rise in markets around the country, one of the most common discussion topics is rent control. Rent control is usually associated with significant increases in housing prices, a shortage of affordable rentals, or both. From a tenant’s viewpoint, the idea of freezing or putting a cap on how much rent they pay may sound appealing. What is rent control, which cities have it, and how does it affect New London rental property owners and landlords? These are the kinds of questions 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 primary objective behind rent control is to keep living costs reasonable for a specific city or state’s population, especially lower-income residents.
Who Has Rent Control?
Rent control has been there for a while, dating back to the 1920s and seeing a comeback in the 1970s. One of the most consistent and fascinating cases of rent control in action is New York City, which has two separate rent control programs since the early 70s. The first program is only available to renters who have lived in their rental homes since 1971, and the other restricts the number of times rents can be increased. This second regulation covers about half of the rentals in the city. But 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
Nowadays, about 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 bit unique approach to rent control, from capping rental rates to limiting increases and paying a renter to move. However, there are numerous different locations where the merits of rent control laws are being debated.
From a landlord’s perspective, the advantages of rent control focus on tenant turnover and decreasing competition in the rental market. For instance, if a renter understands that their rent will remain the same for a given period, they are far more inclined to remain in their rental home long-term. This can help lessen turnover costs for property owners. Rent control also prevents the development of multifamily rental units in certain areas, which might benefit existing rental property owners. Without the competition of new apartments in the neighborhood, single-family rental property owners may find it easier to find and keep tenants for their rentals.
Obviously, these benefits include a list of downsides for landlords, as well. For instance, by setting limits on rent increases or rental rates, rent control laws may prohibit property owners from maximizing their profit potential. Another potential drawback to rent control is that bad tenants won’t want to move. If they are bothersome but not quite in violation of their lease, this might result in some long-term misery dealing with them month after month. Regardless of whether they have clear lease violations, a long eviction process is far more likely if a tenant refuses to move.
The incapability to raise rents could make it more difficult for property owners to meet rising expenses, such as property taxes or insurance. Critics argue that such problems are frequently not taken into account when cities start considering passing rent control laws.
Whether your rental properties are subject to rent control laws or not, you can depend on Real Property Management Hartford Metro/Greater New London to help you keep your rental income competitive and profitable. To learn more about what we have to offer, contact us online today!
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