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Rent control could be coming to more states after Oregon

Oregon law puts a cap on rent increases
Oregon law puts a cap on massive rent increases 01:40
  • After Oregon's rent control law last week, Illinois and New York have introduced similar bills
  • Those laws would slow or stabilize permitted rent increases and make it harder to evict tenants
  • Cities including Philadelphia, Providence and Los Angeles are considering similar action

When he lived in Ashland, Oregon, Jesse Sharpe had his rent increased three times in one year: "We saw a $125 rent increase followed by another $50 increase followed by another $125 increase," Sharpe recently said.

He spoke with his neighbors and found out they all had received the same increases. That's when they learned that one investor had bought not only his apartment building, but the other five rental complexes on his street.

"It was really a bit of a wake-up call for us," Sharpe said.

As Oregon becomes the first state with broad renter protections, which extend to some 500,000 households that live in rental housing built before 2000, housing-affordability activists are hoping it will be the first of many.

The Illinois legislature has seen bills introduced bills to end the state's 22-year ban on rent control and protect anti-gouging provisions on all housing in the state. New York, which has extensive rent-stabilization laws and nearly as extensive loopholes, is considering a slate of measures to close those loopholes, while activists in the state's rural areas are pushing for tenant protection measures that exist in and around New York City to be expanded to municipalities elsewhere. Activists in Philadelphia and Providence, Rhode Island, are also organizing for stronger renter protections.

One tool among many

Rent control isn't the only way to fix the current housing crisis. But it is one of the easiest. A new report from advocacy groups the Right to the City Alliance, Center for Popular Democracy and PolicyLink find that universal rent control would help 42 million households if implemented across the U.S.

Unlike building new housing, rent control takes effect immediately. As a policy, it's cheap to implement and can even be cost-neutral. And, because it keeps costs down, it makes other support like housing vouchers more effective.

Researcher proposes how to solve the U.S. affordable housing crisis 06:07

Oregon lawmakers who supported the rent limit law said it was the first step in a multi-pronged approach to addressing the state's housing crisis. "We need to increase our supply and reform our zoning laws, but this is a policy that is an incredibly big first step," State Senator Shemia Fagan said.

Rents in Portland have surged 30 percent in the last five years. Nationwide, rent has increased 50 percent since 2000, while household income has stayed flat.

In that context, Oregon's law might be more accurately described as an anti-gouging law. It limits annual rent increases at 7 percent plus inflation—more than double the rate of wage increases and on par with average stock-market returns. It also requires landlords to give three months' notice and pay one month's rent if they want to evict a tenant without cause.

An old policy is new again

For decades, mainstream economists have criticized rent control as a marketplace distortion, saying it makes winners losers out of the renters unlucky enough not to have it. Landlords and developers have argued that it discourages the creation of new apartment buildings or improvement of existing ones.

But recent research has poked holes in that narrative. In New Jersey, a recent study found no difference in real estate abandonment or property values­ between cities that had modest rent-stabilization laws and those that didn't.

A report last month from the Community Service Society, an anti-poverty nonprofit, found that loopholes in New York's rent regulations, rather than regulations themselves, account for much of the city's housing crisis.  And some progressive landlords have expressed support for stronger rent regulation.

The view from New York

Prior to Oregon's law, New York City had the largest collection of rent-regulated housing in the U.S., thanks to rent control laws passed in the 1970s. Over time, those laws were shot full of loopholes.

Juanita Amador, who grew up on Manhattan's Lower East Side, remembers the decade before rent stabilization, when she says renter harassment was rampant.

"Growing up there, you didn't have any rights," she said. Amador recalled one day when her father opened the apartment's front door and came upon an eviction in process in the apartment across the hall. The building owner and two "goons," Amador said, had come to the neighbor's house physically pulling the man out of his apartment. Someone in Amador's family ran outside and put a particular color of T-shirts on the clothesline as a signal for neighbors to call for help.

Housing market "perfect storm" 01:14

That was one of the less dramatic scenes from a childhood that coincided with an epidemic of arson and abandonment in the city, which abated once rent stabilization was strengthened, she said.

Amador now lives in Kingston, two hours' drive north of New York, where in the last several years she's seen the harassment she grew up with come creeping back. A management company last March bought the 250-unit complex she was living in, and since that time had filed formal evictions against some 50 people, Amador said. (The county sheriff's office was not immediately available to confirm the eviction figures.)

Founder of the Kingston Tenants Union, she also suspects the company of delaying repairs as a strategy to get its tenants to move. Amador said she'd been unable to use her shower for a week because of sewage backing up into her bathtub. She called the management company about this last week, she said, and then called the local health department when no repair was made.

Speaking with CBS News after the inspector's visit, Amador was frustrated. "He says the only thing he can do is to tell them to fix it," she said. Asking when the repairs could happen, she was told, "to be honest, there is no time limit."

"We ca­­nnot shower because there's feces in our tub," she told CBS News. "My family has to smell it and I can't shower."

Amador is pushing for a slate of changes at the local level that would change the power imbalance in the landlord-tenant relationship, including making evictions harder, requiring security deposits to be returned and ending rent-gouging practices. Among the bills New York State is considering is one protecting tenants from eviction if they can't pay an extreme rent increase.

Amador said she is withholding her rent until her landlord makes repairs, but she knows she is on shaky ground. In most of New York, landlords can currently evict tenants at will or simply decline to renew a lease, making tenants who the landlord sees as unruly especially vulnerable. In fact, so-called no-cause evictions are on the rise across the country, including in Los Angeles, where they are a major driver of the city's homelessness crisis.

Priced out: L.A.'s hidden homeless 25:40

The city of Los Angeles temporarily expanded renters' protections late last year, a first step toward more permanent reforms.

Across the country, advocates are hoping that their case will be bolstered by research showing the importance of housing.

"If your housing is in disarray, your entire life is in disarray," said Zellnor Myrie, a New York State senator elected last fall. "This is a health issue, this is an education issue. My story would not be possible if it were not for rent regulation."

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