Rent Control

Rent Control in New York: An Economic Analysis

Rent control refers to laws that limit the amounts of rent and the amounts that rent can be increased in any year. There is no statewide rent control in the US, and all the rent control laws and regulation are passed by cities. Most of the cities with rent control are located in New York, California, and New Jersey. Washington, D.C. also has rent control.

Rent control first appeared in the United States in the early 1900s as a way of dealing with exorbitant rent prices brought about by wartime housing emergencies and tight housing markets. During this time, rent control was handled by the federal government. In the late 1940’s, the federal rent control system was gradually scaled back and eventually the determination of rent control was left to the individual states to decide. During this time, rent controls were phased out throughout the majority of the country except for New York.

Rent control is a form of “price ceiling” or a government imposed limit on how high a price can be charged on a product.

The graph below illustrates the economic implications of a price ceiling:

In some places, like New York City, rent control and rent stabilization are different things and have different set of regulations. In other places, like Los Angeles, the two terms mean the same thing. Cities with rent control and/or rent stabilization usually have boards or agencies that enforce the laws and where both tenants and landlords can get information about their rights and responsibilities.

Rent control laws don’t just concern rent limits or rent increases. They usually also deal with the landlord’s responsibility to make repairs, lease renewals, evictions, and special rules for groups like senior citizens. In some cities senior citizens are protected from any rent increase, even when increases are allowed for younger tenants.

In places that don’t have rent control, if a landlord doesn’t make necessary repairs the tenant sometimes has to take the risk of paying for repairs and then withholding rent. The danger is that the landlord will try and evict the tenant for nonpayment of rent. In places with a rent control board or agency, the tenant usually doesn’t have to take that risk. The tenant can report the violation to the board or agency and ask for permission to withhold rent. In some cities, if

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