Rent control movement gains momentum as housing prices soar

LOS ANGELES — Skyrocketing rental prices and the surge in a new class of more educated, middle-class renters are fueling a revival of the rent control movement across the country.

About 110 million Americans, or more than a third of the U.S. population, live in rental units. And the biggest increase from 2013 to 2014 was among households earning $50,000 or more a year — the combined result of the foreclosure crisis and changing demographics.

Millennials whose numbers now exceed baby boomers are delaying two major incentives for home ownership: marriage and kids.

As a result, the supply of apartments has shrunk since the Great Recession while the demand soared, creating a surge in rental prices. More than half of renters in 19 states and Washington, D.C., spend more than a third of their income — the traditional measure of affordability — on rent.

This affordability crisis has given momentum to the rent control movement for the first time since its heyday in the 1970s, a time of urban renewal and gentrification. Rent control efforts are underway in Seattle and in Richmond and Alameda in California. A national group, Right to the City Alliance, has launched a national Homes for All campaign to unite renters.

“For the first time in decades, tenant groups are organizing,” said Tony Romano, organizing director of the alliance. He is based in Atlanta, where tenants are pushing for affordable housing in a new 80-acre development in the heart of the city.

“There is a real surge in organizing,” Romano said. “In a lot of places where there are no organizations, they’re contacting us and say, ‘Hey, can you help us organize?’”

One of the national alliances’ members, California’s Tenants Together, has put out a rent control toolkit.

“There’s a very organic demand that’s coming from people who have never heard of rent control before,” Romano said.

Affordability problems among higher-income groups increased significantly between 2001 and 2011. The share of renters earning $30,000–$44,999 and paying more than 30 percent of income for housing jumped by 11 percentage points, to 44 percent, according to Harvard University’s Joint Center for Housing Studies. The vast majority of renters with incomes below $15,000 are spending more than half their incomes on housing.

“Certainly, the abjective economic conditions are there for a new housing movement to emerge,” said Mitch Kahn, vice president and director of organizing for the New Jersey Tenants Organization.

“It’s definitely coming up more in conversation,” said Jim Lapides, vice president of strategic communications with the National Multifamily Housing Council, a Washington, D.C., group that opposes rent control. “Cities are really trying to grasp the problem with the shortage of affordable housing and rent control looks like an easy solution but rent control exacerbates the problem it’s meant to solve,” Lapides said.

Rent control opponents cite surveys of economists that show that most are opposed to rent control. They argue that a cap on the rent that landlords can charge discourages rental development and creates more of a shortage.

“It’s the same people who say raising the minimum wage is going to cost a lot of jobs,” said Peter Dreier, a former housing director for the city of Boston and now chairman of the urban and environmental policy department at Occidental College in Los Angeles. “It never happens but they say it anyway. It just isn’t true. … Most people who studied rent control have found that rent control does not have the negative consequences that the landlords lobby and hired economists say it does.”

He points to the building boom in Santa Monica, a city with one of the strongest rent control laws in the country.

The country needs 300,000 to 400,000 new apartments every year to keep up with population. In 2009, less than 100,000 were built, Lapides said. Last year, the new supply was higher at 255,600 units but still way less than needed.

Miriam Axel-Lute, editor of Shelterforce magazine, a quarterly print and online publication launched by tenant organizers, warns that economists’ opposition is not to rent control but to a fixed cap on rent. Most rent control laws allow for annual increases to reflect the rise in the cost of living.

“We still see people trying to blame the problems of the housing market on rent control,” she said.

Landlords can usually charge market rates once a tenant moves out. Tenants’ rights groups have been actively monitoring whether landlords intentionally ignore maintenance of rental units to encourage tenant turnover.

The number of renters grew by 4.7 million from 2009 to 2014 while the number of homeowners dropped by 600,000, Lapides said.

The rent control movement suffered major setbacks in the past two decades when, under intense lobbying from apartment owners, more states passed laws either prohibiting or pre-empting rent control laws in municipalities. Thirty-five states now have such laws on the books, according to Landlord.com.

Washington is one of the states. The Seattle City Council recently voted to ask the state legislature to lift the ban in their city, where average rent has risen above $1,800 a month, up 70 percent since 2010 .

“We used to be a majority homeowners city,” said Seattle Councilman Nick Licata, a longtime rent control advocate. “Now, we’re 52 percent renters.”

The request may not go far in a Republican-controlled state senate, he said. The governor is a Democrat but the Democratic lead in the state house is only two seats.

“At least, on the record, the city has asked them to move forward on this,” he said.

California, New York and New Jersey have the most cities with rent control laws, including Los Angeles, San Francisco, Pasadena, San Diego, West Hollywood, New York City, White Plains, New Rochelle and Buffalo. More than 100 cities in New Jersey, including Newark, also have rent control laws.

In Richmond, California, rent control advocates are pushing for a rent control measure on the 2016 ballot.

“After the housing meltdown and the decline in home ownership, a lot more middle class people are now renting,” Dreier said.

This new demographic of renters may be intensifying the call for rent control.

“The bottom line here is that all over the country, renters have their backs to the wall,” Dreir said. “They can’t afford to buy a house and they’re competing for scarce housing. It’s happening not only to the poor but to middle-class families. As a result, tenants are getting frustrated and we’re beginning to see a revival of tenants’ rights movements all over the country.”

The challenge is that rent control is a highly-charged political issue, said Larry Gross, executive director of the Coalition for Economic Survival in Los Angeles.

“It’s not based on need, otherwise we’d have rent control in every city in California,” he said. “Obstacles are immense for tenants.”

But today’s more financially and economically diverse profile of renters could help strengthen rent control efforts.

“The cliché I would use is that it’s a burgeoning movement,” Dreier said. “It’s not yet a very well organized national movement.”