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Rent Regulation: Making Housing Unaffordable

Housing Unaffordable

While a majority of states have laws that prevent local governments from enacting rent regulation ordinances, there has been a movement afoot to expand controls on the rent a property owner may charge. Currently, bills have been introduced in several state legislatures that repeal their preemption measures, enable or mandate local governments to establish rent regulation; however, a couple of states are bucking the trend by restraining local government’s ability to pass inclusionary zoning ordinances.

This year, Oregon legislators are weighing whether to advance two bills, HB2001 and HB2003 which rescind the state statute that prohibits local governments from adopting rent control. Legislators in Illinois have joined the fray and introduced HB2430, which would repeal the law preventing local governments from enacting rent control ordinances. Not to be outdone, lawmakers in California are pushing forward with AB1506 to rescind the Costa-Hawkins Rental Housing Act, which placed limited restraints on local government’s rent control policies. Even Hawaii’s legislature has broached this issue with the introduction of HB1267, a bill that requires the Hawaii Housing Finance and Development Corporation and each county to initiate a rent-controlled housing pilot program.

Rent control isn’t the only rent regulation scheme to present itself this year—bills that would enable local governments to ratify inclusionary zoning have proliferated this year. In California, SB277 would enable a county or city to adopt ordinances that require as a condition of development a certain number of units to be set-aside as affordable housing. SB86 was introduced by Colorado policymakers, and this bill would clarify that the state preemption on rent control doesn’t apply to mandatory inclusionary zoning. The South Carolina legislature has introduced SB367 which would allow local governments to implement mandatory inclusionary housing schemes. Although many states are attempting to expand rent regulation policies, a couple of states are actively working to rein-in mandatory inclusionary zoning measures.

In the Tennessee General Assembly companion legislation, HB1143 and SB363, has been introduced clarifying that no local governments has the authority to enact a law that would place greater constraints on a local government’s ability to enact inclusionary zoning. Indiana legislators are reviewing an omnibus bill, SB558, that includes a provision preempting local governments from passing mandatory inclusionary zoning ordinances.

While many state legislatures are pushing forward with bills to expand rent regulation in their jurisdictions, others understand that forcing apartment owners and operators to place ceilings on the rent that can be charged is detrimental to the housing market, and will do little good to solve the housing affordability crisis.

If you are aware of a state bill or local proposal addressing rent regulations, please contact Robert Melvin, Manager, Government Affairs.