As rental rates rise in markets around the country, one of the most common discussion topics is rent control. Rent control is typically accompanied by significant increases in housing prices, a shortage of affordable rentals, or both. From a tenant’s way of looking, the concept of freezing or putting a cap on how much rent they pay may sound engaging. What is rent control, which cities have it, and how does it affect South Roanoke rental property owners and landlords? These are the sorts of inquiries that all rental property owners need to know the answers to in order to take an educated stance.
What is Rent Control?
By explanation, rent control laws are government regulations that limit how much a rental property owner or landlord can charge to lease a home. The ultimate goal behind rent control is to keep living costs low-priced for a certain city or state’s population, especially lower-income residents.
Who Has Rent Control?
Rent control has been around for many years, starting in the 1920s and seeing a revival in the 1970s. One of the most consistent and enthralling 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 presented to renters who have inhabited their rental homes since 1971, and the other restricts the number of times rents can be increased. This second regulation refers to roughly 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
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 somewhat one-of-a-kind approach to rent control, from capping rental rates to limiting increases and paying a renter to move. However, there are various areas where the merits of rent control laws are being debated.
From a landlord’s perspective, the advantages of rent control center around tenant turnover and decreasing competition in the rental market. For instance, if a renter recognizes that their rent will remain the same for a given period, they are undeniably more willing to stay in their rental home long-term. This can help lower turnover costs for property owners. Rent control also tends to inhibit the development of multifamily rental units in certain areas, which may benefit existing rental property owners. Without the competition of new apartments in the neighborhood, single-family rental property owners may think it is easy to draw and keep tenants for their rentals.
Clearly, these benefits incorporate a list of downsides for landlords, as well. For all one knows, by putting limits on rent increases or rental rates, rent control laws may stop property owners from maximizing their profit potential. Another potential shortcoming 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 cause long-term misery coping with them month after month. Regardless of whether they do have clear lease violations, a lengthy eviction process is far more likely if a tenant doesn’t want to move.
The lack of ability to raise rents could make it more problematic for property owners to meet rising expenses, such as property taxes or insurance. Critics argue that these difficulties are often not taken into account when cities start thinking about passing rent control laws.
Whether your rental properties are subject to rent control laws or not, you can lean on Real Property Management Colonial to assist you in making your rental income competitive and profitable. To learn more about what we have to offer, contact us online today!
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