Here’s an unusual end to a story about rent control initiatives. In recent years, tenant advocates across the U.S. have been pushing rent control initiatives in response to rising rents and stagnant incomes. But in Huntington Beach, California, an initiative to impose rent controls on mobile-home parks was withdrawn as property owners and tenants appear to working out rental agreements amongst themselves. Members of the Huntington Beach City Council figured out that rent control would only make the situation worse.
An interesting legal challenge to California rent regulations to keep an eye on: California property owners are allowed by State law to evict all their tenants if they are taking the property off the rental market. San Francisco’s new ordinance requiring two years of relocation payments is being challenged by the San Francisco Apartment Association on constitutional grounds.
It seems to be the same story everywhere: give tenants’ rights and chances are, at least one person will abuse them. Two particular cases in Southern California are certainly egregious cases, but nevertheless, tenants are abusing the system throughout the country. One tenant noted in this story landed on California’s Vexatious Litigant List, which identifies people who are known to bring frivolous lawsuits. How about a Vexatious Litigants List for New York?
It should not take owners several months and thousands of dollars to evict nightmare tenants such as these two. Between court fees and loss of rent, the numbers add up. Perhaps it is time to reevaluate the system and make sure that owners can easily have protections from intolerable tenants.
In the middle of a New York City Rent Guidelines process that has property owners fearing the first ever zero rent increases in City history, the Newark City Council passed a new ordinance that will make it much more difficult for property owners to raise rents in rent-controlled units.
Prior to the vote, owners were permitted to raise rents annually by 5% if their building has 49 units or less and by 4% if the building has more than 49 units. Owners could also ask the City of Newark to raise rents up to 25% in vacant apartments if they were able to show proof that they spent $100 or more in making an individual apartment improvement. The new ordinance caps the annual rent increases to the New Jersey Consumer Price Index and caps the increases of vacant apartments to 20% and raises the threshold to request that higher rent to $5,000 per room in a given apartment.
Newark property owners are livid with the new ordinance, stating that it fails to “take into account the cost of maintaining those buildings and disincentives from making improvements to their properties.” New York City property owners can agree with this. With a Price Index of Operating Costs (PIOC) showing an increase of 5.7%, including increases in all components of building operating costs, the New York City Rent Guidelines Board is clearly not taking into account all the costs that owners face when maintaining their properties. The first ever zero rent increase was proposed by the RGB despite these increases in operating costs and now New York City owners are scurrying to make sure a final vote of zero rent increases does not leave them in a similar burden that Newark owners must now deal with.
The Bayonne Tenant’s Organization is once again challenging a rent control law adopted by the City over two years ago. After falling 122 signatures short of getting its rent control ordinance on the May ballot, the organization was able to collect nearly 2,000 signatures to place the initiative on the upcoming November ballot.
In 2011, Bayonne adopted a vacancy decontrol law that allows property owners to apply to have units in their buildings removed from rent control guidelines. Under the current Bayonne law, owners can opt out if a tenant willingly moves or is legally moved. Although the tenant’s organization came up short in the November 2012 ballot, a Bayonne law allows petitions such as this to be brought up as many times as they want as long as 10 percent of the number of voters from the previous election sign the petition.
With nearly double the amount of signatures from the November 2012 election secured, the Bayonne Tenant’s Organization is confident about building a positive campaign to have the decontrol law repealed.
The latest challenge to change rent controls in Hoboken was officially withdrawn on Tuesday, February 18th. After appearing on the November 2013 ballot for the second straight year, a referendum to change rent controls was once again narrowly defeated by a slim-margin of 122 votes, which led advocacy groups to challenge the decision in court.
Although Hoboken Mayor Dawn Zimmer called upon the New Jersey Attorney General to investigate the vote count last month, supporters decided to withdraw their challenge after the judge indicated that voters would have to testify about contested vote-by-mail ballots.
An article in the Orlando Sentinel takes a look at the current income-inequality debate in the United States as President Barack Obama is set to deliver his State of the Union speech tomorrow night, Tuesday, January 28th. The writer of the piece believes that until The President realizes the connection between private-property rights and long-run income creation, our country will continue to see more laws, more force, more regulations and more income inequality.
The US Supreme again refused to hear a challenge of rent control laws this time involving a long running challenge of a mobile park ordinance in California. What was particularly interesting about this case was that the owners had a achieved a favorable lower Court ruling which declared the ordinance unconstitutional based on the finding that the ordinance did nothing to promote affordable housing. If the Supreme Court ever gets back to the notion that rent control laws must be rationally related to achieving some desirable public purpose, no rent control ordinances would withstand that test.