Promising News on Rent Control in Tennessee and Wisconsin
A proactive approach to addressing rent regulation can pay significant dividends by protecting members from the harmful economic impacts of price controls on rental housing. This is evident from the success NAA affiliates are experiencing in championing legislation that would ban mandatory inclusionary zoning at the local level.
NAA previously reported on the bills in Tennessee (HB1143) and in Wisconsin (AB770). The Tennessee proposal has been transmitted to Governor Bill Haslam, and a Wisconsin measure has been sent to Governor Scott Walker. At this point, the governor of Tennessee has 10 days from the date of transmittal to sign or veto the bill, otherwise it will become law without his signature. In Wisconsin, the governor has six days from the date of transmittal to sign or veto the bill, otherwise it will become law without his signature.
Down in the Pelican State, the Apartment Association of Louisiana and a coalition of real estate groups have been promoting SB462 in the legislature. The legislation would rewrite a state law that allows local governments to mandate inclusionary zoning and changes the language so that it would be voluntary and incentive-based. The proposal has been gaining momentum and recently was engrossed and ordered to a third reading and final passage in the Senate.
In Mountain View, CA, there is an effort underway to curtail and roll back the rent control law passed in 2016. The group leading the charge is called “Measure V Too Costly,” and it recently filed paperwork for a proposal known as the “Mountain View Homeowner, Renter and Taxpayer Protection Initiative.”
The initiative would do the following:
- Prohibit the rent control board from paying themselves a salary;
- Prohibit the rent control board from making funding demands from the city General Fund without city council approval;
- Create income eligibility requirements for residents;
- Limit fees charged to property owners for administering the rent control program;
- End the use of the Consumer Price Index as a baseline for determining citywide rent increases on rent controlled apartments;
- Lifts the rent control cap if the vacancy rate exceeds 3 percent in the city; however, the rent control cap is reinstated if the vacancy rate drops below 3 percent;
- There is no limit on annual rent increases if the rent control cap is not in place, but any increases that exceed 7 percent would require both parties to go through a three-step mediation program that could lead to non-binding arbitration.
The Mountain View City Attorney has 15 days to review it and draft a summary. Once that has been completed, proponents can start to gather the requisite 15 percent of valid voter signatures to place it on the ballot.
While Mountain View, Tennessee, Wisconsin and Louisiana have been pushing back against rent regulation, several other local governments are taking a different approach.
California continues to see a growth in efforts to either expand or enact rent control. We have recently witnessed at least four different cities—Alameda, Santa Ana, Sacramento and Santa Monica—move in this direction. While all the efforts vary in focus, they all have one common feature: They are ballot measures pertaining to rent control.
Even though rent regulation remains a threat in many jurisdictions, the efforts of affiliates in Wisconsin, Tennessee and Louisiana provide a roadmap for other members and affiliates to take a proactive approach. Employing an effective strategy at the state level can help protect members from overreaching local governments.
NAA continues to stand ready as a resource for our members, affiliates and the rental housing industry. If you are aware of a state bill or local proposal addressing rent regulations, please contact Robert Melvin, Manager of Government Affairs.