When Floridians are facing double-digit rent increases, they are likely to wonder: are there any limits on what my landlord can charge? The answer, in short, is “no.”
In some communities, in the United States and abroad, there may be restrictions on rent increases. Not, however, in Florida.
In Florida, we have accepted many limitations on the supply of housing (prohibitions on multi-family or small-lot housing, for example) but none on its cost, which naturally creates spikes in rental prices when demand is high.
If you listen to people in the real estate industry, you’d think that rent regulations (which they often call “rent control”) destroy a community’s housing market and lead to widespread disinvestment. But such regulations are in effect in New York City; many cities in California, New Jersey and Oregon; as well as cities across Europe from Paris to Barcelona to Vienna. If regulating rents is such a disaster, why are rent-regulated communities among our most vibrant?
In fact, rent regulations can be effective. To be sure, rigid controls are likely to backfire — if rents can’t increase at all, then owners can’t maintain properties. If regulations are too onerous, they may discourage investment in existing or new housing, and that hurts everyone.
But rent regulations don’t need to be rigid, and they can balance the human needs of tenants with the legitimate financial needs of property owners.
In New York City, rents in “stabilized” apartments can be increased annually based on higher ownership costs, and newly constructed units are exempt from rent regulations unless their owners had taken advantage of a public subsidy program. Oregon landlords can raise rents up to 7% on new leases, and in Vienna (Austria), landlords can pass along costs of capital improvements.
Some systems exempt landlords who are renting out just one or two units; in others, rent regulations are tied to city-wide vacancy rates, so when housing is abundant, regulations are reduced or dropped. These are among the ways policy makers can design programs that ensure security for vulnerable tenants without removing incentives to build and maintain rental properties.
Despite the claims from landlord-affiliated interests that rent regulations are always problematic, research findings on their impact are mixed. For example, a San Francisco study found that tenants in regulated apartments had longer tenures in their units, suggesting that they could enjoy greater stability in their homes even as gentrification trends intensified. Another study comparing New Jersey communities with or without rent controls found that there was no statistical difference between the housing markets in these places — in other words, rent regulation did not discourage housing investment, contrary to the assertions of critics.
There may be some who are wary of rent regulations because they interfere with the rights of private landlords to operate freely. But even private rental housing is part of system that is already heavily regulated. The value of one’s rental property owes a lot to public investments — roads, transit, parks and schools. The rent you can charge is largely determined by the supply of housing, which is constrained by public regulations.
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If you rent out your property, you must abide by fair housing, health and safety rules. And finally, if a landlord seeks to evict a tenant, the authority of the court system and sheriff’s office stand behind her. So housing is — legitimately, given its importance — already an area with a lot of government involvement. Rent regulations would not represent some large departure from what had been a completely free market.
To be clear, there are many reasons we are unlikely to see rent regulations adopted in Florida anytime soon. The state constitution doesn’t completely forbid local adoption of rent regulations, but makes the conditions for such action onerous. Even if rent controls could be adopted, cities would need to create oversight systems, and this could be a heavy lift. Even so, Tampa’s City Council has taken the first steps to exploring a short-term limit on rent increases with its recent declaration of a housing state of emergency.
But rent regulations would, in fact, help many Floridians. Regulated rents would alleviate uncertainty for Florida’s renters, who represent 35% of all households. In the current housing crisis, families are faced with frequent moves, evictions, and homelessness, causing more than just a disruption in their lives. Although the adoption of rent regulations may have upfront costs, an unregulated rental system carries high costs as well.
Elizabeth Strom is associate professor in the USF School of Public Affairs, and co-leader of the Florida chapter of the Scholars Strategy Network.