A growing number of state and local governments are considering rent control legislation, and unfortunately, Hawaii is putting a new spin on an old—and failed—policy from the past: rent regulation.
Lawmakers in Hawaii want to create a statewide system of rent controls. HB2575 is one of two proposals that attempts to achieve the aim of controlling prices on rental housing. This proposal would establish a new state law for rent stabilization, outlines how property owners comply, lists unlawful actions under the new measure and how rents will be calculated. The other bill in the Aloha state is SB2980. While slightly different than the bill in the House, it still seeks to create a statewide rent control law.
NAA is seeing movement on the mainland as well. Legislators in Illinois are once again attempting to roll back the state law that prohibits local governments from adopting rent control. This year lawmakers are considering SB2310. State Senator Daniel Biss (D-9), who introduced it purports the bill will allow “working families to stay in their homes and to push back against this dangerous wave of gentrification.” Unfortunately, what Senator Biss fails to realize is that rent control will adversely affect the populations he claims he wants to protect—low income residents, the elderly, families with children and disabled individuals—while providing the greatest benefit to higher income populations.
In Massachusetts, HB3541 is again being considered. This proposal, which was introduced last year, would authorize Boston to pass a rent control measure that would effectively carve out one of the largest metro areas in the Commonwealth from the state law prohibiting rent regulation.
At the local level, tenants’ rights advocates in California continue their quest to build on the successful rent control campaigns in 2016 in Mountain View and Richmond. This time, they are focusing on the cities of Santa Cruz and Long Beach. In both jurisdictions, tenants’ rights groups have submitted proposed ballot measures, and the cities have 15 days to review the title and text of the initiative. If approved, organizers in Santa Cruz will need to collect 8,000 valid registered voters’ signatures, and groups in Long Beach need to gather 27,000 valid registered voters’ signatures within 180 days to be placed on the November 2018 ballot.
Policymakers champion rent control because they believe these policies will help renters, however these proposals only exacerbate housing affordability because rent regulation runs counter to basic economic principles. These policies drive up rents, discourage new construction and investment in housing, reduce the amount of available units, require the creation of large bureaucracies to administer the law and cost governments property tax revenue.
Aloha to basic economics!
If you are aware of a state bill or local proposal addressing rent regulations, please contact Robert Melvin, Manager of Government Affairs.