How to Use it

Get the Facts

Rent control advocates should know the facts about the benefits and burdens of rent control, and be familiar with studies that question the benefits. Landlords and the real estate lobby frequently cite such studies, arguing the negative impacts of rent control. Oftentimes these studies are flawed due to methodological errors. In reviewing these:

• What are the variables being studied? Are there more important ones that should have been included or variables that should not be included? The problems that landlords attribute to rent control, if and when they exist, are often caused by factors other than rent control.
• Does the research use the same set of variables when looking at rent controlled vs. non-rent controlled municipalities? A common error is the use of unmatched samples. For example, it does not make sense to compare rent-controlled urban areas with non-rent controlled suburban or rural ones. (For an example of landlord-sponsored research using arbitrarily unmatched samples, see the Smith article in the Resources section.)

In addition to being prepared to respond to anti-rent control arguments, it is important to have and proactively disseminate the facts and figures that support rent control. How many residents have been or will be displaced without some form of rent stabilization? How many elderly with fixed incomes live in the community? College students? Teachers? Health care workers? Police and firefighters? What stories can be told to put a face on the residents that will be impacted by the adoption or lack of rent control?

For a discussion of arguments typically made for and against rent control, see the Challenges section.

Draft a Strong Rent Control Law

Rent control is only as strong as the law that creates it. Therefore, it is important to draft legislation that provides broad protection for tenants. Equally important, rent control law must be legally sound. Rent control legislation is often subject to legal challenge once enacted; some laws have been struck down by courts as unconstitutional.

Key provisions to consider in drafting a rent control law include:

• Preamble. Most rent control laws contain an introduction (or preamble) that describes why the law is being enacted. Some places require that certain conditions exist in the housing market to make rent control permissible. If this is the case, the Preamble should state that the purpose of the law is to respond to those specific conditions. For example, some laws cite the lack of affordable housing, low vacancy rates, and other housing emergencies.
• Applicability. Every rent control law has a section that specifies the types of dwellings covered by the law. The goal should be to cover as many tenants (i.e. dwellings) as possible and to keep the number of exceptions to a minimum. Some laws exempt one or more of the following: hotels, owner-occupied buildings below a certain number of rental units (usually two or three), co-ops and condominiums, single family homes, government controlled housing, newly constructed apartment buildings (permanently or for a limited amount of time), and health care facilities.
• Registration. It is important that there be a public record of all rental units covered by rent control. Therefore, the rent control law should require landlords whose property is covered by the law to register their buildings and rent rolls with the administrative agency charged with enforcement (e.g. Rent Board, Office of Rent Administration). Some laws require landlords to pay registration fees based on the number of rental units they own. These fees are often used to finance the operations of the agency (see Financing Rent Control).
• Definition of Terms. Definitions for the terms used in the law - such as landlord, tenant, rent, property, dwelling, allowable annual increase, capital improvement, and rent board - should be clear and precise.
• Administration. This section describes the agency that will be responsible for administering and enforcing the law. Usually it is a Rent Board or municipal Office of Rent Administration , with staff who are either appointed or elected. The provision that defines the membership of the agency should expressly provide tenants with fair and adequate representation. In Lynn, Massachusetts, for example, tenants demanded a Rent Control Board made up of 50 percent low- and moderate-income tenants and 25 percent homeowners. This stipulation should also indicate eligibility for membership, length of terms, and the powers and duties of the board.
• Establishment of Rent. This section is the heart of the rent control law because it sets the amount of permissible annual rent increases. Some laws establish a base rent (usually the rent that existed at a certain date) upon which to base future rent increases. In setting the rate of allowable increases, different formulas are used. Some laws automatically grant landlords a fixed percentage annually, which the governing body may amend from time to time. Other laws grant landlords an annual increase based on the increases in the Consumer Price Index (CPI) as established by the U.S. Department of Labor. A number of rent laws grant authority to the administrative agency (e.g. Rent Board, Office of Rent Administration) to calculate the annual increase using a local variation of the CPI. When using a CPI formula to set the rate of annual increases, include a maximum percentage to better protect tenants during periods of high inflation.
  
  It is also important to include "substantial compliance" and "no diminishment of services" provisions in the law. These measures allow the administrative agency to deny rent increases to landlords who are not in compliance with health and building codes, and to reduce rents when landlords cut back on existing services.
• Vacancy Decontrol. Vacancy decontrol undermines rent control because they allow landlords to raise rents well above the allowable annual increase when a tenant moves out. Sometimes, decontrol permanently removes the units from rent control, leading to a complete phase out. Therefore, ideal rent control law would not allow vacancy decontrol and would require rent controls for vacant units.
  
  However, the political reality is that legislative bodies often include vacancy decontrol provisions as a concession to landlords. In this situation, the best regulation for tenants is a fixed percentage increase upon vacancy. In New York City, the ordinance allows 20 percent. Less desirable provisions, such as those in California, New Jersey and elsewhere, allow rents to be raised to market levels before coming under rent control again. Permanent vacancy decontrol provisions are the most problematic.
• Capital Improvement Surcharge. One goal of rent control is to maintain affordable housing in good condition. Therefore, rent control laws usually provide landlords with incentives to make improvements on their property by allowing capital improvement surcharges (i.e. additional income from tenants to cover the cost of improvements). Since tenants pay these surcharges, it is important to guard against excessive, long-term increases. Capital improvement surcharges should not be added to the tenant's base rent, and they should be time-limited and capped at a reasonable level. The law should include clear application procedures, and require the landlord to meet specific filing, evidence, and notice requirements. Tenants should be provided a right to review and challenge the landlord's application.
  
  Ideally, surcharges should be granted only for improvements that add to the value and substantially extend the useful life of the landlord's property, and should exclude amounts paid for incidental repairs and regular maintenance which are currently deductible under guidelines in 26 U.S.C.A., Section 263 of the Internal Revenue Service Code. Some laws require a landlord to first spend an amount equal to a certain percentage of the buildings assessed value before allowing the landlord any capital improvement surcharges.
• Other Types of Surcharges. Beyond capital improvement, other types of surcharges should be resisted or limited. Some laws allow surcharges for extraordinary increases in landlord expenses for items such as taxes and fuel. While they are designed to be temporary in nature, they often become permanent due to administrative laxity. It is better to factor in these costs when establishing the allowable rate of annual rent increases, or deal with them under landlord hardship (see below), than to include them as another tenant surcharge.
• Landlord Hardship Appeal- Definition of Fair Return. Court decisions require that rent control laws provide landlords with a procedure for claiming "hardship" (generally defined as less than a "fair return" on investments ). Without a hardship appeals procedure, a rent control law will likely be found unconstitutional. In defining the procedure, require detailed rules of evidence that include strict proof of the landlord's income and expenses, the financial history of the building complex, and other books and records applicable to its operation. Different approaches can be used to define "fair return." The two most common are "return on equity" formulas, and those based on a percentage or maintenance level of "net operating income." (For a thorough examination of "fair return" formulas, see the Barr and Keating guide and the Helmsley v. Ft. Lee case in the Resources section.)
• Non-Waiverability Clause. Landlords sometimes weaken rent control by putting waivers of rent control rights in tenant leases or rental agreements. To protect tenants against these waivers, include a non-waiverability clause in the rent control law that prohibits such waivers or modifications.

• Anti-Eviction and Anti-Retaliation Protection. In those municipalities where tenants are not covered by strong local or state " eviction for good cause" and "anti-retaliation laws, such protections should be included in the rent control law. Eviction regulations should spell out the specific conditions that must be met and the procedures that must be followed to evict a tenant. The law should also give tenants protection against landlord retaliation in response to tenants asserting their rights under the rent control law, including organizing or joining a tenants organization or making good faith complaints to the landlord, administrative agency or other public officials.

• Enforcement. The law should include strong enforcement provisions, including criminal penalties for violating the ordinance, remedies for tenants who suffer damages due to violations, and the right to administrative, legislative and judicial review. Some rent control laws allow appeals of rent board decisions to go directly to the courts; others may require appeal to a local governing body (e.g. city council) prior to filing a lawsuit.

Several rent control laws are available for review on the Internet. California has two excellent examples:

• Berkeley
• Santa Monica

In addition, a model rent control law will soon be available from the New Jersey Tenants Organization (NJTenantsOrg@excite.com).

Build and Mobilize Support

Building and then mobilizing a broad base of support for rent control is critical to using and maintaining the effectiveness of this tool. In addition to renters, enlist support from other individuals and organizations committed to affordable, mixed-income, multi-racial communities. Rent control campaigns have found outspoken allies among public officials, small homeowners, labor unions, student groups, mental health organizations, elderly groups, women's organizations, and faith-based communities. National organizations such as the NAACP or ACORN can also provide support to local efforts to achieve rent control, as well as links to organizations in other jurisdictions that have successfully passed or defended rent control laws. A media strategy and other activities designed to get the word out are also essential to building public will in support of rent control.

Evaluate Opportunities

Rent control laws have been passed by governing bodies with the political courage to enact protections for tenants against excessive rent increases and inevitable displacement, and by the electorate through initiative campaigns and referenda. There are pros and cons to either strategy, some of which are discussed in the Emily Achtenberg article below.

An initiative campaign in Berkeley, California led to the passage of a rent control law. Initiative campaigns were also conducted in Lynn and Cambridge, Massachusetts. While these efforts failed to directly result in passage of rent control laws, they resulted in the establishment of citywide tenant organizations and laid the foundation for eventual success in passing rent control.

Sustain Progress

Passing a rent control law is only the first step in stabilizing renters. The new law must be monitored in its implementation and enforcement to ensure its effectiveness. For example, it is important to obtain fair and adequate tenant representation in the appointment or election of agency staff (e.g. Rent Control Board members, Rent Administrator). Advocates must also be vigilant in evaluating ongoing support for rent control and defending against anti-rent control attacks. The Achtenberg article below suggests establishing a permanent tenant organization to monitor the law and keep tenants and other supporters informed of developments that threaten tenants.

More on Using this Tool.

Emily Achtenberg's article entitled "Organizing a Rent Control Campaign" discusses additional issues relevant to structuring a rent control campaign based on the lessons learned by tenant organizations in Massachusetts. Among other topics, she comments on the importance of political education, organizational development, choosing appropriate strategies and running an initiative campaign.