International Events Highlight Rent Control Deficiencies

A public opinion poll finds that a majority of Britons are in support of a call by the Labor Party in England to re-impose rent controls, which were eliminated by the Thatcher government in the 1990’s . This is paradoxical since the movement is motivated by the increase of rents in privately owned housing, which is again playing a vital role in the English housing market after having been all but eliminated by decades of rent control. The Britons do not seem to have learned that seeking to assure affordability by limiting rents can have devastating effects on the rental stock.

On the other hand , Spain seems to have learned from its mistakes. As of the first of the year, rent controls on commercial and retail properties have been eliminated. Spain’s commercial rent controls have been in place since the Franco regime and led to deterioration of these establishments.

New York State politicians would do well to look at experiences of rent control around the world before reflexively extending local rent regulations.

European Court Rules Rent Controls Unconstitutional

If the US Supreme Court tackles another property rights takings case it may want to take notice of a recent Euro Court decision involving an old rent control law in Malta. The European Court of Human Rights ruled recently that a Maltese rent control law dating back to 1979 was unconstitutional because it failed to strike a balance between a community’s need for housing protection and the landlord’s fundamental rights. As a result, Malta will now amend its law to provide for minimum rents, regular rent increases based on an index, and the elimination of inherited tenancies.