Government policy response to the pandemic has also created the conditions for the spread of rent regulation such as rent freezes and rent cancellation in many places, the National Apartment Association (NAA) writes this month.
The NAA says they expect more state legislatures to propose rent regulation on an emergency basis, opening the door for consideration of more permanent legislative changes.
At the state and local level, several jurisdictions have considered or enacted temporary rent freeze or rent cancellation policies during COVID-19. California and New York have seen rent cancellation bills introduced and gain some support. Washington State, Los Angeles, CA, Washington, DC, as well as Baltimore, Howard County, and Salisbury in Maryland have passed temporary rent freezes through the end of their local emergencies via either executive order or city council ordinance. The Massachusetts legislature is considering similar legislation that would allow cities and towns to implement a rent freeze or rent control for the duration of the state and federal state of emergency declarations due to COVID-19.
“The economic effects of COVID-19 have spurred policymakers at all levels of government to employ eviction moratoriums of varying lengths to protect renters, particularly those of low or moderate-income, from displacement,” the NAA writes.
“While these restrictions have largely achieved that aim – at the expense of the rental housing industry – the results are merely temporary and have led renters to accumulate large amounts of debt that, based on past industry experience, will never fully be repaid.
“Unpaid rent will eventually come due and, when it does, renters who have not received rental assistance dollars will be on the hook. In response, renters’ rights advocates have promoted various types of rent regulations as one of a group of policies intended to protect renters from eviction and displacement.”
Housing is healthcare argument
The NAA cites as an example Our Homes, Our Health is a renter advocacy group that has been pushing for drastic policy changes to protect renters during COVID-19, leaning on the argument that “housing is health care.”
Recently, these advocacy groups have begun using a “price-gouging” argument to push for removing rent control preemptions and passing rent cancelation legislation.
“They contend that COVID-19 and the economic instability it has wrought necessitates regulating rent increases to prevent widespread displacement. With additional aid from Congress looking increasingly unlikely until at least after the election, policymakers could see aggressive rent regulation policies as a low-cost option for cash strapped jurisdictions searching for ways to protect vulnerable renters.
“While there are only six states that have either enacted statewide rent regulation or allow for local rent regulation, price gouging laws are much more common, with 36 states having such laws on the books. Generally, price gouging laws prohibit the sale of “necessities” for an excessive price during state and local emergency declarations. COVID-19, and the substantial job losses that have resulted, has bolstered the case for making it more explicit that housing is a necessity covered by price-gouging measures or going a step further, enacting even more stringent rent regulation laws,” the NAA writes.
To help combat the ongoing push for increased rent regulation, the rental housing industry will have to use multiple tactics and messages. One example is to articulate the pivotal role apartment properties play in supporting municipal tax bases. Nationwide, apartments contribute $58 billion in taxes to the local economy each year. Cities across the country are facing massive budget shortfalls from the COVID-19 pandemic, increasing the importance of these tax contributions.
Continuing to push for the funding of rental assistance programs will also be crucial to staving off rent regulation policies. If designed appropriately, these programs support struggling renters and housing providers equally and preserve tax contributions and the 17.5 million of jobs supported by the rental housing industry, reducing the perceived need for rent regulation.
Like eviction moratoria, rent control and other rent regulation policies fail to address the ongoing housing and financial instability of renters. Eviction and rent restrictions will only exacerbate the housing affordability crisis by placing increased financial pressure on housing providers, especially small mom and pop owners who operate much of the nation’s naturally occurring affordable housing. A balanced housing policy is needed to address the supply and demand imbalance that inflates rents and facilitate the construction of more housing at affordable price points.
To learn more about rent regulation, please contact Alex Rossello, Manager of Public Policy or visit the Rent Regulation Policy Page on the NAA website. For more information on the newest research tools on rent regulation and eviction moratoria from NAA’s research team, please contact Leah Cuffy, Research Analyst.