As rental rates rise in markets around the country, one of the most usual discussion topics is rent control. Rent control is typically accompanied by significant increases in housing prices, a shortage of affordable rentals, or both. From a tenant’s observation, freezing or putting a cap on how much rent they pay may seem alluring. What is rent control, which cities have, and how does it affect Goodlettsville rental property owners and landlords? These are worries that all rental property owners need to know the answers to take an educated stance.
What is Rent Control?
By classification, rent control laws are government regulations that limit how much a rental property owner or landlord can charge to lease a home. The primary point behind rent control is to keep living costs equitable for a particular city or state’s population, especially lower-income residents.
Who Has Rent Control?
Rent control has existed for a long time, beginning in the 1920s and seeing a comeback in the 1970s. One of the more consistent and compelling examples of rent control in action is New York City, which has had two exclusive rent control programs since the early 70s. The first program is only eligible to renters who have stayed in their rental homes since 1971, and the other restricts the number of times rents can be increased. This second regulation involves almost half of the rentals in the city. But critics argue that the high cost of rent in New York City (rent is typically close to $3,000 a month for a small apartment) proves that rent control is unsuccessful.
Pros and Cons for Landlords
At the moment, almost 180 municipalities in the U.S. currently have rent control regulations, including but not limited to New York, New Jersey, California, Maryland, Oregon, and Washington, D.C. Every city has a different approach to rent control, from capping rental rates to limiting increases and paying a renter to move. Yet, there are some other sites where the merits of rent control laws are being debated.
From a landlord’s perspective, the advantages of rent control center around tenant turnover and decreasing competition in the rental market. Perhaps, if a renter knows that their rent will remain the same for a given period, it will likely stay in their rental home long-term. This can significantly diminish turnover costs for property owners. Rent control limits the growth of multifamily rental units in certain areas, which might benefit existing rental property owners. Without the competition of new apartments nearby, it might be simpler for single-family rental property owners to obtain and keep tenants for their rentals.
Undeniably, these benefits also include a list of downsides for landlords. For instance, by limiting rent increases or rental rates, rent control laws may restrain property owners from maximizing their profit potential. Another possible downside to rent control is that bad tenants won’t want to move. If they are taxing but not entirely violating their lease, this could initiate long-term misery dealing with them month after month. Granted, they have clear lease violations, but a lengthy eviction process is much more likely if a tenant does not want to move.
The absence of the capacity to raise rents could make it more troublesome for property owners to meet rising expenses, such as property taxes or insurance. Critics argue that these matters are frequently not considered when cities pass rent control laws.
Whether your rental properties are subject to rent control laws or not, you can count on Real Property Management Key Response to assist you in maintaining your rental income competitive and profitable. To learn more about what we offer, contact us online today!
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