[8]: 1 In 2019, Oregon's legislature passed a bill which made the state the first in the nation to adopt a state-wide rent control policy.
[22][23][24] In the United States during World War I, rents were "controlled" through a combination of public pressure and the efforts of local anti-rent-profiteering committees.
[26] It was not until the 1970s, during the economic recession, that Richard Nixon temporarily implemented a national wage and price controls to combat inflation, but this did not last for long and began to phase out in 1973.
Many smaller communities also have rent control — notably the California cities of Santa Monica, Berkeley, and West Hollywood[27] — along with many small towns in New Jersey.
Rent control laws have stayed on the books for decades in New York because of an inadequate supply of "decent, affordable housing".
[38] New York expanded rent control to encompass other municipalities in 2019 through the passage of the Housing Stability and Tenant Protection Act of 2019.
[40] New York's rent control laws have also received criticism for inadvertently benefiting affluent tenants who might not otherwise need rental assistance.
[51] It also includes a requirement to show "just cause" for evictions, and retains "vacancy decontrol", meaning that rents can increase to market rate between tenants.
According to the National Bureau of Economic Research, the number of rental units was reduced by 15% and tenants were 8-9% less likely to move due to rent control.
[55] During its existence, those who lived in rent controlled apartments included Ruth Abrams, a Justice of the Massachusetts Supreme Judicial Court, and Frederik, Crown Prince of Denmark.
[56] It was blamed for the death of at least one landlord, due to the stress caused by a ruling from a rent control board that would require him to raise his entire house to create a new, legal apartment in the basement.
[57][58][59] After the repeal, the Massachusetts General Court passed a law protecting low-income tenants in rent control apartments from being evicted.
[64] The frequency and degree of rent increases are limited, usually to the rate of inflation defined by the United States Consumer Price Index or to a fraction thereof.
Officers in city government assign members of the board, which will ensure mixed numbers of tenants and property owners to balance out their benefits.
As stated in Goodman's research, a typical rent control board in New York is structured by two tenants, two landlords, and one homeowner.
After the 1930s New Deal, the Supreme Court ceased to interfere with social and economic legislation, and a growing number of states adopted rules.
[citation needed] In the 1986 case of Fisher v. City of Berkeley,[69] the US Supreme court held that there was no incompatibility between rent control and the Sherman Act.
[75] In 2012, only 2% of economists surveyed believed rent control had a positive impact on New York City and San Francisco; 81 percent disagreed.
[79]: 1 [85]: 1 [86]: 1 Two economists from opposing sides of the political spectrum, Nobel Laureate Paul Krugman (who identifies as an American liberal or European social democrat),[87] and Thomas Sowell, (who stated that "libertarian" might best describe his views)[88]: 1 have both criticized rent regulation as poor economics, which, despite its good intentions, leads to the creation of less housing, raises prices, and increases urban blight.
A 1990 study of Santa Monica, CA showed that vacancy control in that city protected existing tenants (lower increases in rent and longer stability).
[93] The measures (both rent control and growth management) helped displace new construction from the metropolitan areas to the interiors of the state with low income and minority populations being particularly impacted.
[94]: 1,44 [95] [96]: 1 [97][98] The authors stated that "This substitution toward owner occupied and high-end new construction rental housing likely fueled the gentrification of San Francisco, as these types of properties cater to higher income individuals."
[1]: 1 [101] In older buildings, rent control may broaden incentives to renovate individual units: tenants may invest sweat equity and their own money to improve their homes if they are protected from landlords trying to capture the added value,[102][103][citation needed] while vacancy decontrol preserves landlords' financial incentive to renovate vacant units because it allows them to re-rent at market value.
[104] A 2019 NBER working paper, which evaluated the efficacy of different housing affordability government policies, found that better targeting of rent control (towards the neediest households) could be welfare improving.
[106] In 2000, New York Times columnist and Princeton University economist Paul Krugman published a frequently cited column on rent control.
In 1992, a poll of the American Economic Association found 93 percent of its members agreeing that 'a ceiling on rents reduces the quality and quantity of housing."
In September 2019, the Washington Post argued,[109] "Rent-controlled laws can be good for some privileged beneficiaries, who are often not the people who really need help.
In September 2019, the Wall Street Journal wrote,[110] "Economists of all stripes agree rent control doesn't work.