There are 300,000 rental units in Philly. Is it time for rent control? | Pro/Con

At her first meeting as a city councilmember, Kendra Brooks, who won an at-large seat in November as a member of the Working Families Party, introduced a resolution calling for hearings on rent regulations in Philadelphia. For Brooks, this resolution makes good on a key campaign promise. She is one of two renters currently on Council. (Jamie Gauthier, also a freshman legislator, rents in West Philadelphia.) There are more than 300,000 rental units in Philadelphia.

This is not the first time renters’ rights have been discussed in Council. During her first term, Councilmember Helen Gym pursued an aggressive agenda that resulted in the passage of several renter protection laws, including right-to-counsel — guaranteeing low-income renters a lawyer in landlord-tenant court. Also in 2019, Councilmember Curtis Jones Jr. worked to ensure passage of the “Good Cause” eviction bill, which prohibits landlords from unjustly evicting tenants.

Rent control measures were recently adopted in New York and Oregon as a means to assist low-income renters. In introducing the measure, Brooks noted that over half of Philadelphia’s renters are cost-burdened and over a third spent more than half their incomes on rent. However, critics of rent control worry that the policy would be a short-term solution to a long-term problem, ultimately discouraging development and leading to a housing shortage that would disproportionately impact citizens most in need.

The Inquirer reached out to the Philadelphia Tenants Union and the Pennsylvania Apartment Association to debate: Does Philly need rent control?

By Karen Harvey

If you are a resident of Philadelphia, you know that housing is getting more and more expensive, and for many of Philadelphia’s poorest and most marginalized residents, it is becoming impossible to live in this city. Not coincidentally, these are often long-term residents of Philadelphia, who are being displaced by a younger, whiter, and richer set of newcomers moving into the city and driving up the cost of rent.

The most important solution to this problem is to pump the breaks on the increasing cost of rent, which is driven primarily by landlords increasing it. Around the world and in our own county, there is a simple and effective policy that achieves this goal: rent control. Rent control protects tenants from excessive rent increases by creating a schedule of reasonable and gradual rent increases. Under rent control, a locally controlled Rent Board sets a cap on annual rent increases, preventing landlords from increasing rents beyond the cap.

Rent control will reduce the displacement of our most vulnerable citizens: black and brown people, especially single mothers of color who are far too often at the bottom of the income ladder. It prevents rents from skyrocketing when neighborhoods in urban communities are developed and gentrified and allows tenants to plan and save for reasonable rent increases.

Rent control increases housing affordability. Tenants in cities with rent control pay less for housing, which frees up a family’s household funds to cover bills, utilities, food, and other essentials that many Philadelphians increasingly cannot afford. The executive director of the NYC Rent Control Board said that “rent regulations have been [New York City’s] single greatest source of affordable housing for middle- and low-income households.”

Rent control will reduce the displacement of our most vulnerable citizens: black and brown people, especially single mothers of color who are far too often at the bottom of the income ladder.

Compared with other housing policies, rent control can be implemented quickly and cheaply. The state of Pennsylvania does not prohibit rent control, so Philadelphia can enact the policy right now, without waiting for state or federal action. Because rent control would require only the establishment of a Rent Board, the cost to the city would be low, covering only administrative costs. And setting regulations on rent increases is actually low cost compared to building and maintaining affordable housing and subsidy programs.

Rent control would predominantly benefit low- to middle-income households, which are the most rent-burdened households in the city.

Rent control represents a win-win for tenants and developers alike. Opponents of rent control say that it depresses the construction of new housing. But in cities with rent control, a review of construction rates found no discernable decrease in construction following the adoption of rent control. Rent regulations keep money in the local economy by allowing renters to redirect money that would have been spent on rent to other household expenses. The city’s small businesses would benefit, as consumers would have more money to spend on goods and services of neighborhood vendors. Additionally, rent control still allows landlords to get a fair return on their investment.

There are many myths about rent control, but a critical eye shows that these are just poor excuses for this lifesaving and essential regulation. The real question for Philadelphia is not why rent control, but when.

Karen Harvey is the campaign director for rent control for the Philadelphia Tenants Union.

By Marlynn Orlando

Rent control and stabilization policies have become a hot topic across the country lately, sparking much debate as to whether they are effective in reining in urban housing costs. On one side, we have Oregon and New York, which recently adopted new statewide rent control laws. On the other side, we have economists from across the country, like those on NPR’s Freakonomics, who dedicated a whole podcast episode to explaining “Why Rent Control Doesn’t Work.”

Something both sides have in common is the desire to find a real solution in providing quality affordable housing for all urban residents. However, as seen in “rent-controlled” or “rent-stabilized” New York City and San Francisco — where the average rent for a one-bedroom apartment is around $3,680 — so-called rent control not only doesn’t work. It backfires.

Over the years, the negative impacts of rent control have been thoroughly researched, and its harm to communities thoroughly documented. A resounding 93% of economists polled by the American Economic Review agree that a ceiling on rents actually reduces the quantity and quality of housing available — and 36 states currently prohibit municipalities from imposing ceilings on rents altogether. But how quickly we forget lessons learned, even when learned the hard way.

Rent control and stabilization policies limit annual rent increases to a certain percentage, like NYC’s stabilized rate of 2.5% for a two-year lease. Which sounds great, right? Wrong. That means landlords are going to start setting their rents higher during unit turnover than they would have in the first place, because once they set a price, they’re more or less stuck with that price until the tenant leaves, regardless of how much their taxes and other expenses go up.

Secondly, rent control and stabilization discourages investors from embarking on new construction in a city that has them, which limits the city’s overall supply of housing. And a smaller housing market means more competition among renters, making prices go up even more.

Rent control and stabilization discourages investors from embarking on new construction.

Rent control’s disastrous effects don’t stop there. Less investment means fewer buyers and lower value of rental properties in the city, which in turn can adversely impact local and state governments since the resulting decline in property values leads to a decline in property taxes.

In short, rent control would actually worsen Philadelphia’s housing shortage and disproportionately impact residents the city is trying to help — those with the least amount of housing options. And let’s face it, how often have we heard of someone in New York with a “fabulous rent-controlled apartment” who was not actually low-income and in need of that apartment? All the time.

Ultimately, the way to keep rents lower is to ensure we create policies and programs that encourage the development of affordable rental units and responsible management of quality housing in our neighborhoods, as well as subsidies to those who need them. Implementing rent control in Philadelphia will only make it more like New York — where, to paraphrase Jimmy McMillan, the rent is just too high.

Marlynn Orlando is the chief executive officer of the Pennsylvania Apartment Association.