On November 3, voters in Portland, Maine approved a referendum that would cap most rent increases in the city and require a series of renter protections. Despite a similar referendum failing resoundingly in 2017 and opposition from Mayor Kate Snyder, seven city councilors, local businesses, affordable housing developers and rental housing providers, the referendum passed with 58 percent support.
The measure, which appeared as Question D on Portland ballots, implements a rent regulation regime similar to those found in New York City, San Francisco and Washington DC, applicable to all units in the city, with few exceptions. Rent increases are limited to the rate of inflation, with additional increases allowed upon vacancy of a rent-controlled unit or to cover growth in property taxes.
A seven-member rent board with no more than three housing provider representatives will decide the fate of petitions for additional increases, such as major capital improvements. Even after increases are approved, additional rules apply. For example, all permitted increases in excess of 10 percent must be banked for use in a subsequent rental year.
The referendum also called for other renter protections, including adding source of income to list of protected characteristics in local fair housing laws and extended notice provisions that would be extremely difficult and burdensome for housing providers to operationalize—a 75-day notice requirement for rent increases with the option to appeal to the rent board and 90-day notice required for the nonrenewal of “tenancies-at-will,” except as otherwise provided below:
- "For Cause" tenancies are terminable on 7 days' notice pursuant to existing statute;
- Short-term rentals with a term of fewer than 30 days' and holdover tenancies are exempt from the 90-day notice period;
- Where a housing provider provides $500.00 reimbursement to the renter for the inconvenience of termination, tenancies-at-will may be terminated by notice to the tenant of sixty (60) to eighty-nine (89) days; or
- Where a housing provider provides $1000 reimbursement to renter for the inconvenience of termination, tenancies-at-will may be terminated by notice to the renter of thirty (30) to fifty-nine (59) days.
While passage of rent regulation policy anywhere in the nation is harmful to the industry, the success of the Portland voter referendum is more of an outlier than a strong predictor of similar legislation passing elsewhere in 2021. In terms of the initiative itself, there were few opportunities for the community to fully understand and debate the measure, which was backed by the Southern Maine Democratic Socialists of America. It also received little external media focus in comparison to the presidential election and Maine’s senate races.
In a Portland Press Herald article, Brit Vitalius, President of the Southern Maine Landlord Association, highlighted, “It was hard to have substantive discussions about these complex issues in an age of COVID when there were no neighborhood meetings to attend and where the media was consumed by the senate and presidential race…we could feel it in our campaign, just trying to get someone to pay attention.”
There are several other reasons to think the passage of rent regulation in Portland was a one-off situation. Strict rent regulation in California has now been resoundingly defeated twice by large margins at the ballot box (Proposition 10 in 2018, Proposition 21 in 2020), demonstrating that simply getting such a policy onto the ballot does not ensure an increased chance of passage. Moreover, passing rent control through the legislative process is equally, if not more, challenging. Elected officials, even in more progressive states, are weary of overturning state level rent control preemption laws and giving jurisdictions free reign to design and pass their own rent regulation policies. Attempts by renter advocacy groups to do so in consecutive legislative sessions in Illinois, Colorado, and Massachusetts have failed, due in no small part to NAA affiliate advocacy.
The approval of rent control in Portland may have been an aberration, but legislative fights still await the industry in 2021. Rent control is experiencing a resurgence in popularity and continues to be a primary plank in the progressive policy platform. As we highlighted in last month’s Apartment Advocate, these groups are using the economic fallout of the pandemic to support the need to regulate rents through emergency price gouging legislation and renter displacement prevention measures.
Advocates for the rental housing industry continue to refocus the conversation on increased funding of rental assistance programs and other housing policies that balance the needs of renters and housing providers who are struggling due to COVID-19. We must address both supply and demand imbalances and the underlying financial instability of low- to moderate-income renters to improve housing affordability long-term. NAA and its affiliated apartment associations remain committed to advocating for this approach to housing policy and aggressively protecting the interests of the rental housing industry.
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.