Rent Control in New York: An Economic Analysis
Rent control refers to laws that limit the amounts of rent and the amounts that rent can be increased in any year. There is no statewide rent control in the US, and all the rent control laws and regulation are passed by cities. Most of the cities with rent control are located in New York, California, and New Jersey. Washington, D.C. also has rent control.
Rent control first appeared in the United States in the early 1900s as a way of dealing with exorbitant rent prices brought about by wartime housing emergencies and tight housing markets. During this time, rent control was handled by the federal government. In the late 1940’s, the federal rent control system was gradually scaled back
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In places with a rent control board or agency, the tenant usually doesn’t have to take that risk. The tenant can report the violation to the board or agency and ask for permission to withhold rent. In some cities, if the condition of a rental property is very bad, the board or agency can take over, collect the rents, and make repairs.
Because rent control sometimes ends or the rent can be raised when a tenant is evicted, landlords may abuse the right to evict tenants. Most cities that have rent control laws limit the reasons for an eviction. A landlord can’t give the tenant a 30-day or 60-day notice that the tenant must leave. The landlord must have a good reason for the eviction such as nonpayment of rent, breach of the rental agreement like pets that aren’t allowed, or illegal activity.
The broad powers of rent-control boards and agencies mean that many more issues and disputes about landlord-tenant issues are resolved in informal hearings instead of in courts during eviction proceedings. Some cities provide mediation services as well, to help landlords and tenants work out their differences.
Rent control laws were popular in the 1970s into the 1980s, but organized landlord opposition to the laws caused some of them to be repealed or weakened after the late 1980s. In the places where rent control still exists, it has usually been affected by two kinds of decontrol. The first is called
Doug also did not pay the utilities, which was an agreement that had been reached in the contract. Doug does not have any rights to stay in the apartment. He violated his rental contract by not paying the full amount of rent and failing to pay the utilities. Doug's failure
In 2008, the American population saw a large wave of home foreclosures during the Great Recession that created an economic crisis that displaced millions of homeowners. Unable to recuperate from the terrible financial situation, these persons found comfort within the rental property industry. These previous owners, unable to purchase new homes, began renting property and living as tenants, contributing to the 4% growth record of the rental industry as published in a study that was conducted by Harvard University. With the growth of this industry, rental property owners began to devote more of their time to the development and marketing of their rental properties. These owners began providing lower rates for their properties, and they began making improvements that allowed them to increase the net profit that they received. With the continual “boom” of the industry and the popularity that it is receiving due to young adults needing places the live, rental property owners need an effective program that allows them to oversee their properties and communicate with their tenants.
In 2011, the Los Angeles Human Right to Housing Collective joined together with citywide residents to protest unfair housing practices, and increasing rents at Los Angeles City Hall. Over the past four years, Los Angeles residents have seen rapid increases in rent, which is leading to more and more people moving out of L.A. in the hopes of finding more affordable living arrangements. The three percent rental increases that Los Angeles residents are accustomed to have been climbing this past year, and in 2016 many Angelenos could be seeing a four or maybe even five percent cost of living increase. Studies from the U.S. Census will show that Los Angeles renters occupy not even 50 percent of Los Angeles county housing units. In comparison to the percentage LA renters are taking home per paycheck, it is now becoming more affordable to buy property in Los Angeles, rather than rent.
apartments in certain areas of a city. The goal is usually to protect the rights
New York City is one of the places that has rent stabilization. If you were a middle class working individual looking for a place to live it might be more difficult than you would have thought. The rent control policy in simple terms is that the government has set limits on how much a landlord can charge for rent. This policy was intended to lower prices and balance out the control between residents and landlords so that tenants with lower wages can housing. Although this policy does have positive aspects, there are many unintended consequences as a result. Since there is a control on how much a landlord will charge, many of these rentals have lower-quality living conditions. There is also a problem with availability because many rentals already
In some states, an owner must also live on the property to legally rent apartments for short period of time. Additionally these locations are required to pay hotel or tourist taxes. AirBnB has faced fines and court cases in Barcelona, New York. AirBnB needs to ensure they are following each state’s housing guidelines.
There are lots of benefits brought by the rent control after it was adopted. First of all, the rent control lowers the rent, so that the rent apartments have become more affordable for the public, especially for poor and working people. One statistic that may help with this statement would be the journal published by Gerard Mildner and Peter D. Salins in 1991, they stated that the normal apartment renting price was about $180 in 1975 because of the rent control. 12 years later, which is 1987, the rent price increased to around $400 due to the inflation. We can see from the data that the rent went up for about 130% in 12 years. However, the consumer price in general only rose 105%. (City Journal) Therefore, instead of only maintaining the current rent price, the rent control also helps to prevent
In Baltimore, the abandoned houses allowed investors to buy the houses and turn them into luxury condominiums and houses. In turn, this encourages other companies to continue to develop condominiums and houses and abandon the development of low-income housing. This cycle is called gentrification, but it is disguised as restoration to the city
“Racial tension became paramount as city officials promoted and perpetuated racial division by supporting segregation and discrimination in housing, employment, and social services” (Massey & Denton 39). Various types of residential controls contributed to the problem of residential segregation. One such tool for segregation was the establishment of zoning. Zoning was introduced in New York City in 1916 and encouraged by the U.S. Department of Commerce through the publication of the Standard State Zoning Enabling Act in 1922. Zoning proponents argued:
When you own your home, you have the luxury of not answering to a landlord, and the ability of decorating the inside and surrounding property as pleasing to you. But as a renter you have the flexibility to move when desired instead of staying stationary in a purchased home.
One of the most prevalent forms of discrimination is through housing. While modern discrimination is typically difficult to figure out the exact intentions of the person accused of discrimination, such as a boss not choosing a minority to fill a management role, discrimination in housing has continued to be more obvious. The reason why housing is so important is because where a person lives dictates the school the resident’s children go to, the infrastructure such as hospitals, parks and libraries, and also availability of employment. Many of the housing inequalities have been caused by the Federal government such as the national appraisal system and subsidizing suburban areas, and not enforcing abolishing restricted covenants.
and reviews. For example a poorly reviewed and ‘riskier’ renter would be charged more than a
This activity is prohibited by California law (in relation to commercial real estate). According to Section 1954.25 of the California Civil Code, commercial rent control would not encourage a competitive environment for businesses and could provide one business with an unfair advantage over another. Under Section 1954.27 of the California Civil Code, public entities are not allowed to enact or enforce any form of commercial rent control. Commercial landlords are allowed to enter into a capped rental agreement with public agencies
Some economists would argue the above mentioned examples of why rent control is harmful to
Gentrification is not a new phenomenon. It’s merely the act of settling amongst a new area and establishing power, which is the same thing as immigration and colonialism. Colonization is an outdated word, and immigration is associated with people of color, so Gentrification is the modern term that’s being used to describe what’s currently going on, regardless of the fact that it’s