tenant rent control laws - does it work ?

 “I began to realize that being beautiful is like having a rent-controlled apartment overlooking the park: completely unfair and usually bestowed upon those who deserve it least.”                                

                                                                                            Carrie Bradshaw

Rent control is a non-topic for 47 of the 50 American states that don’t have it. There shouldn’t be much to discuss.

But these three states happen to be among the most populous and influential in the country: New York, (19.5 million residents), New Jersey (8.8 million), and California (37.1 million), may be the only remaining jurisdictions that still contend with rental price controls & tenancy deposit not protected within 30 days , but the sheer volume of the population affected (66 million), and the inherent socio-economic conflicts of such policies ensure that the issue will remain a contentious for some time to come.

To keep things focused, we will discuss only the case of rent control law in New York State, which has the longest history of rent regulations

Rent control has a history that began midway through World War II in anticipation of the end of the conflict, when more than 15 million U.S. (11 % of the population) and 2.7 million Canadians (41% of the population) would be returning home; those who couldn’t return to a warm hearth needed housing. The logistics threatened to throw the supply and demand cycles of rental properties into turmoil and leave many would-be tenants at the mercy of landlords who could raise rates through the roof based on the overwhelming demand for space.

In addition, the massive government investment and subsequent employment opportunities created by the Second World War lead to consumer demands that couldn’t be met in a wartime economy, leading to inflation.

The first formal rent controls in the U.S. began under such conditions, as a part of the federal Emergency Price Control Act (EPCA) of 1942, which was, “…the government’s response to inflationary pressures resulting from a fully employed wartime economy that channeled resources exclusively to the war effort. Price controls for rental apartments in residential areas were included in the EPCA. Rents in most counties in the State were placed under Federal regulation. On November 1,1943 the Federal Office of Price Administration issued regulations freezing New York City rents at the March 1, 1943 levels.”

http://www.tenant.net/Oversight/50yrRentReg/history.html

 

Roosevelt’s address on the EPCA compared the war effort overseas to that of the homeland battle:

“The Emergency Price Control Act of 1942 is an important Weapon in our armory against the onslaught of the Axis powers. Nothing could better serve the purposes of our enemies than that we should become the victims of inflation. The total effort needed for victory means, of course, increasing sacrifices from each of us, as an ever larger portion of our goods and our labor is devoted to the production of ships, tanks, planes, and guns. Effective price control will insure that these sacrifices are equitably distributed.”