The pros and cons of rent control
Rent control has
Some in Montgomery County advocate the adoption of rent control. They believe it would be a panacea for tenants facing difficulty in paying their rent. Nothing could be further from the truth.
Rent control dates back to World War I. In both world wars, it was adopted as a temporary wartime measure, to blunt the impact of shifting resources to the war effort. Cities such as the District of Columbia saw a huge influx of workers needed in the war effort. No practical way existed to meet the sudden increase in demand for housing and rent controls were imposed to prevent landlords from taking advantage of the housing shortage. After each war, as things returned to normal, rent control was repealed.
Starting in the 1960s, rent control was adopted in a number of jurisdictions to shift to landlords the public cost of housing low-income families. This policy failed. Rent control caused the rental housing stock to shrink and deteriorate. Most jurisdictions recognized this and repealed their rent control laws. To this day, however, Washington, D.C. and a few other cities have rent control, because their laws have created a middle class constituency that views rent control as a subsidy, which these tenants can spend on discretionary items. Rent control, then, does not help those most in need and, in fact, results in less, and less decent, housing for lower income tenants. The reason for this is easily explained.
To minimize rent increases, rent controls specify how often, and by how much, landlords may increase rents. These laws also require landlords to seek government approval of rent increases needed to fund expensive repairs or improvements to their buildings, including those needed to protect the safety of the tenants. The process of obtaining that approval is often made so burdensome and arbitrary, however, that landlords put off performing needed repairs, knowing approval for rent increases will be delayed or denied outright.
Also, when rents are controlled, there are tight restrictions on the eviction of tenants. These restrictions are imposed to prevent landlords from evicting tenants who choose to remain in their residences indefinitely, so that they remain immune to significant rent increases. One impact of these restrictions is that landlords are unable to refurbish units in need, because such work can often be done only after a unit is vacated.
The end result is a deterioration in the stock of lower cost housing. As that happens, tenants with higher incomes move to better buildings, leaving only lower income tenants in the deteriorating structures. It then becomes impossible to raise the rent of those remaining tenants appreciably, or to charge higher rents to incoming tenants. As a result, there is not enough money to keep up these properties.
In the end, then, rent control harms precisely those for whom it was ostensibly enacted.
Roger D. Luchs, Bethesda
The writer was chairman of the Montgomery County Commission on Landlord-Tenant Affairs from 2002 to 2005.
I empathize with Matt Losak's view ["Renters need laws to protect them against abuse," March 24] that it is frightening to feel that a landlord can evict you from his property with no warning. Rental units are very scarce in Montgomery County, and rates are raised annually by property owners who are taking advantage of the market conditions.
Where I disagree with Losak is on his proposed implementation to keep rates down. Imagine a scenario where the property owners are afraid that you will move out and go to an apartment that is nicer and costs less than the one you live in now. This would be the reality if we simply had more units available for rent in the county.
The Montgomery County politicians have not been overly friendly to new apartment building options. Building height and zoning restrictions make this area less attractive to potential new rental construction. If you throw in a threat of rent control laws, you can count on never seeing a nicer rental option show up. If you want to see rental rates start to trend down, rather than up, start lobbying county officials for some rules that will help ensure new rental properties get built.
Eric Finch, Silver Spring
Tenants report biased
I read with interest your March 10 editorial "Tenants' rights" and the March 24 letter from Matt Losak, "Renters need laws to protect them against abuse."
Both refer to a county study on rent affordability and renters' ability to stay in their homes. To conduct this study, County Executive Isiah Leggett established a Tenants Work Group. Note that Leggett didn't ask landlords or realtors to participate for their perspective.
I reviewed this report and found it completely one-sided. It consists of wish list items for tenants without regard of rental market impacts. Not one regulation of tenants was recommended. More importantly, its conclusions are not supported by the data. Over 80 percent of respondents reported modest rent increases in line with voluntary guidelines. Fear of retaliatory lease termination was not proven at all no such questions were asked. The report provides a single example that a court ruled wasn't a retaliatory eviction.
In his letter, Losak claims landlords will not "pull out" even if they're "fairly regulated." He provides no evidence. As a landlord for 25 years, I am seriously considering selling and going out of this business. With property values dropping, taxes and operating costs skyrocketing, a hostile government and more limitations placed on my rights, I'll continue to lose money for years to come. I dare say that Losak would pull out if his life's savings were invested where he couldn't earn a fair return.
But all this aside, here's the real source of large rent increases the government itself. There's no need for an expensive study, just ask any landlord. My property taxes have increased an average of 12.7 percent for each of the last five years that's over 63 percent total. Property taxes are now one-third of my total rents and the single biggest component of rent increases. Landlords don't benefit from homestead protection against large tax increases. These increases are simply passed on to tenants in the form of higher rent. Somehow this didn't make it into the report.
The Tenants Work Group Report is nothing but a waste of taxpayer money. This biased document advocates legislative changes without any evidence of real problems or serious marketplace analysis. The data presented actually prove no new regulations are needed. The public is hardly marching in the streets over tenant injustice. Out of 95,000 tenants in Montgomery County, a mere 40 people attended the public hearing.
This work group was structured with only tenants to justify more regulation of landlords. The fact that the data don't support its conclusions is lost in the calls for more regulation. The public manipulation is obvious. The goal is more regulation regardless of the real need. This is a desperate act. It is a solution in search of a problem.
Tenants in Montgomery County don't need more regulation. Tenants need lower property taxes and fewer costly regulations to keep rents down.
Ken Sprinkle, Potomac
should be enforced
Regarding "Montgomery County needs more affordable housing, officials say," March 3, it is interesting that there was no mention of preserving existing affordable rental units, yet the elimination of such units through rent increases is the largest source of the loss of affordable housing in the county.
In the "Montgomery County Rental Satisfaction Survey," conducted by Salisbury University for the Montgomery County Tenants Work Group, 43 percent of respondents did not believe that they could continue to afford to pay rent in their current rental five years from now.
Rentals in Montgomery County, by all accounts, are becoming too expensive for many moderate and modest income individuals and families to afford. The county executive annually issues guidelines for rent increases (4.4 percent in 2009, 2.8 percent in 2010), based on the cost of living and related factors, but the guidelines are ignored by a significant number of landlords as shown by the Salisbury University survey. This leads to a dwindling number of affordable housing units, a supply which, because of the cost, cannot possibly be replaced by new construction or purchase of units by the county.
The issue for our county and our county government is whether we are willing to stop this loss of affordable housing and displacement of our neighbors. Do we believe that all residents should benefit from the development taking place in the county or only those with the means not to be priced out? Will the county executive and council members speak up for renters, many of whom have lived in the county for years, raised their children here, and paid taxes to fund such improvements as the Metro and the redevelopment of downtown Silver Spring, which we all now enjoy.
A thousand county residents, both renters and homeowners, have signed a petition calling on the county to enforce its current rent guidelines, protect existing affordable housing and take measures to expand the supply. We will be submitting the petitions to the county executive and County Council. In the 2010 elections, we will take note of how our elected officials respond to the affordable housing crisis in Montgomery County. We hope other voters will do the same.
Wally Malakoff, Takoma Park
The writer is co-chairman of Progressive Neighbors, a grassroots advocacy group.