The high cost of living and the lack of affordable housing for Americans coming from all income brackets has seized the attention of policy makers and community workers across the country. The introduction of rent control polices, and legislation is intended to cater the residents’ concerns regarding cost of living and affordable housing. However, these policies have led to an unsettling result.
In this article, we will explore the pros and cons of rent control in Florida to understand the bigger picture.
Pros
Affordability
One of the primary benefits of rent control policies is that they provide affordable housing options to cater to the needs of low-income individuals or families. This allows for financial savings over time that would otherwise be consumed in rent. Furthermore, this policy ensures availability of low-cost housing options for those in need.
Stability
Rent control policies provide stability to residents’ and tenants as the cost of rent will be capped. The rent is regulated, and annual increments in rent are limited according to the local legislation. This makes sure that the existing tenants can easily renew their lease and continue living in their unit. This provides stability to families in maintaining neighborhoods and addresses, as no sudden inflation is expected.
It also ensures a stable or stagnant real estate market of rental units as it is regulated and controlled by the legislative bodies. This prevents the market from experiencing a rise or fall in prices due to the supply and demand laws of economy.
Prevents Displacement
Under rent control policies, there is a higher likelihood of lease renewal as tenants would be less likely to move out. Since moving out would risk a higher cost of living elsewhere, the tenants would be inclined to renew their lease at the regulated increment in rent. This allows the tenants to opt for long term occupancy making it highly affordable.
This is also a benefit for the owner of the building as higher occupancy means low cost of vacant residential units. It is more harmful to the building owner if a place is vacant so high likelihood of lease renewal is beneficial for both parties.
Cons
Discourages Investment
The biggest con of rent control policies is that it discourages investment in the real estate market of buildings. One of the biggest incentives investors have in real estate is that they can build or renew units and charge rent according to the free market. Without the ability to charge rent freely, the investors are discouraged from investing into existing or new buildings.
Investors will lose their interest in newer buildings as they will not be able to recover their money through revenue generated under rent control policies.
Housing Options
Rent control policies also effect the availability of housings options. This happens because landlords no longer have an incentive to maintain or improve their properties for tenants since they can not charge more rent. Some landlords may choose to reutilize their properties instead of renting them out for minimal profit.
This takes off much needed properties off market and reduces the actual number of rental options for tenants, adversely driving the prices even further.
Housing Quality
In addition to reducing the housing options available, rent control policies also negatively affect the quality of housing. As the economic incentive to invest in newer buildings or preexisting ones, landlord shave no reason to spend their money for the maintenance of their properties. Furthermore, the properties under this legislation tend to fall back on the available amenities and standard of living.
Since the landlords can not charge rent freely, the landlords have no incentive in upgrading their property or appliances. They will not invest in providing latest amenities and furnishing but rather leave things be. This will result in poor quality houses or units that lack in basic amenities and upkeep. The landlords have no incentive in upgrading their property or appliances. As a result, the quality of housing will decline.
Housing Cost
Rent control tends to drive up the cost of affordable housing which may sound unlikely to happen. Under rent control policies, the quality of housing and the availability of affordable housing units declines in the market.
As a result, finding reasonable housing can be a difficult and time taking process for many. Due to these difficulties, families or individuals may end up paying more for housing than they would have without rent control policies in effect. Furthermore, landlords can artificially raise the prices on market rental units and cause the rent of housing units to rise.
Gentrification
Rent control policies can lead to gentrification, as landlords look for options to circumvent the rules to make profit.
This can happen if landlords start to rent out to people who are willing to pay above the regulated legal rent amount. In some cases, landlords might start taking charges for facilities that are generally included in rent, such as parking space and laundry services. This in turn leads to displacement of existing residents in favor of families or individuals who are willing to pay more for the same properties.
Evictions
Rent control policies leave little to no room for landlords and investors to make profit. As a result, landlords are less likely to work with tenants who fall behind on their rent with little to no flexibility. More tenants will be evicted on this basis.
Furthermore, landlords may choose to evict lower rent paying tenants in favor of tenants who are willing to pay more. This will also drive evictions up.
Disadvantaged Groups
Rent control policies can also result in disproportionate impacts on the minority groups or the already disadvantaged communities. As these groups are more likely to rent their houses rather than own them, the adverse effects of rent control policies leaves with low quality housing options. This puts them forcibly into the face of other social challenges.
Furthermore, having to pay more for adequate housing becomes a necessity leading to financial stress and less flexibility towards savings or economic stability.
In conclusion, rent control policies reap a much negative result than desired. The intended goal of this policy is to promote affordable housing for the needs of low earning individuals and families, but the result of these policies has done the opposite. Although short term benefits are reaped, over the course of time, the quality, cost, and availability of housing has declined under this policy. Hence, it is safe to say that rent control is trouble in disguise and does more harm than benefit.
How to Help?
- If you are interested in playing a positive role against rent control, here are a few things you can do:
- Advocate for policies that promote high quality affordable housing exclusive of rent control
- Educate yourself and people around you about the adverse effects of rent control policies
- Support organizations that are building high quality affordable housing
- Donate money to organizations that help families with rent
- Volunteer in public campaigns against rent control
Rent control legislations are well intended but produce undesired results.
By taking responsibility and playing a positive role in community, you can help in the struggle against rent control legislations in your locality. By actively educating people about this and taking action yourself, you can make a difference by preventing the harms of rent control policies.
All these harms contribute to the affordable housing crisis in the USA, especially the states with rent control legislations in place. The good news is that there are many organizations and individuals working to find solutions that are far better. One such is Community Reach that provides the homeless a chance to get back on their feet by donating 100% of their earnings to charity.
You can help others in your community through philanthropic shopping at Community Reach today. Affordable housing with adequate quality is a problem that been around for many years, but with your help, we can help make a difference.
