Overview
In localities experiencing strong housing demand, tools are needed to protect renters with low incomes from rapid increases in housing costs. Various states and localities have considered anti-gouging rent regulations as a way to stabilize rents and protect tenants from increased housing cost burdens and risks of displacement.
Anti-gouging laws are broad protections that set caps on rent increases to protect renters from drastic rises in housing costs. Under these laws, allowed rental increases are set at a specific percentage, set in line with changes to the consumer price index (CPI), or set as a combination of the two.
Such protections build on a complex history and debate about rent regulations. The idea of rent regulation often evokes historical rent control models, which involved fixed allowable increases and a strict ceiling on rent amounts. Some evidence supports concerns that rent control may reduce the number of rental units and that the lowest-income households do not benefit the most from rent regulations in the long term. However, these research results are mixed, and some studies do not show the same negative effects in all cases.
Most promising, research shows that rent regulations support improved housing conditions and quality of life for residents. These regulations stabilize rents by slowing the increase in housing costs and reducing displacement of residents of color from their neighborhoods. This helps maintain social ties, connection to schools and community resources, and neighborhood diversity.
Anti-gouging rent regulations can be designed to best fit a locality’s conditions and needs to counteract potential negative consequences evident with past rent control laws. Anti-gouging rent regulations are more flexible than other rent control laws in allowing larger increases in rent and exemptions. Other accompanying policies can also help these protections stabilize prices and tenure for those most vulnerable to displacement. Thirty-six states ban rent regulation laws within their borders. Of those that do allow the passage of rent regulations, a number of states and localities have passed statewide anti-gouging regulations or local ordinances.
Examples of This Strategy in Action
- In 2019, Oregon passed Senate Bill 608, setting a statewide rent regulation to stabilize rents. The new law sets rent increases to no more than 7 percent per year plus the annual change in the consumer price index. To avoid discouraging new developments, rental properties younger than 15 years old are exempt from the regulations.
- California followed Oregon in 2019, passing AB 1482—the California Tenant Protection Act—setting a statewide rent regulation. The law sets annual rent increases to 5 percent, plus local cost-of-living adjustment for variation based on localities. Unlike Oregon, California’s law sets the cap for rent increases at 10 percent, and it exempts certain properties along with rental properties less than 15 years old.
- Oakland, California, passed a rent control ordinance in 1980, creating the Rent Adjustment Program. Under the ordinance, rent increases followed changes in the CPI—not to exceed 10 percent or 30 percent as part of a five-year tenancy—and could only happen every 12 months. Exemptions exist for certain properties including those built between 1983 and 1995. In 2022, the ordinance was amended amid concerns of increasing housing costs. Now, rent increases can be either 60 percent of the CPI or 3 percent, whichever is lower.
- In 2021, voters in St. Paul, Minnesota, approved the Residential Rent Stabilization Ordinance, which sets all rent increases within a 12-month period to 3 percent. The ordinance was amended in 2022 to allow landlords to request exemptions from the regulation based on a “right to fair return on investment,” to allow increases of rent after a tenant vacates a unit up to 8 percent plus CPI, and to exempt apartments less than 20 years old.
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