20.8 million households pay more than 30% of their income on rent, and 11 million pay more than 50% of their income on rent according to the Joint Center for Housing Studies of Harvard University. 47.7% of renters in metropolitan areas, and 38% of renters across the U.S. experience rental burden in 2015 (latest numbers available) according to the NYU Furman Center. Individuals and households experience rental burden when more than 30% of the household income is spent on rent each month. This burden is disproportionately experienced by low-income and minority households. On average, low-income families (lowest 20% of income) spend 56% of their income on rent according to the Federal Reserve.
553,742 people experienced homelessness on a single night in 2017 according to a recent report from The Department of Housing and Urban Development. This was a 0.7% increase from 2016. The report found that increasing rates of homelessness were particularly prevalent in high-cost areas, and in areas where rent is rising faster than incomes.
The United States is facing a housing crisis.
There are a number of ways that the federal, state, and local governments have addressed or worked towards addressing this issue including expanding the National Affordable Housing Trust Fund, raising the minimum wage, repairing and building more public housing, providing rental assistance, and implementing rent control.
Let’s take a deeper look at rent control: Rent control limits the amount that landlords can charge for rent. It can: limit the frequency of increases in rent, regulate when rents can be increased, regulate the services that are connected to rentals, limit when and how landlords can evict tenants, and mandate arbitration or mediation in the case of disputes. Rent control measures can also allow for decontrol when the rental unit is vacant and permit special rent increases if the unit is changed (e.g. renovation or improvement.)
Rent control works to ensure that low- and extremely low-income households have access to affordable housing. Spending less money on rent allows households to cover basic necessities, and spend money on local businesses thereby boosting local economies. It helps teachers, firefighters, and other civil servants (who, despite their service to their communities, earn less on average than the median pay in America) stay in areas close to their communities and places of work.
Despite these clear benefits, only four states currently allow some form of rent control: California, Maryland, New Jersey, and New York. Eleven states do not have rent control but also do not prohibit it, while 24 states have prohibited it.
Even in the states that do allow rent control, there are rules and limitations that restrict local governments from making rules that fit their local communities and economies. For instance, California’s rent control rules restrict its local governments severely to the detriment of its citizens.
In California, rental burden (households that spend >30% on rent) exceeds 50% of the population in each of the three largest cities. Rental burden is experienced by 61.2% of the population in Los Angeles, 54.3% of the population in San Diego, and 53.3% of the population of San Jose according to BallotPedia.
According to a report by the California Department of Housing and Community Development, “The majority of Californian renters — more than 3 million households — pay more than 30 percent of their income toward rent, and nearly one-third — more than 1.5 million households — pay more than 50% of their income toward rent.” In addition, the report found that “California is home to 12 percent of the nation’s population, but a disproportionate 22 percent of the nation’s homeless population.”
However, this may be about to change.
On November 6th 2018, California voters will vote on a ballot proposal entitled Proposition 10 (Prop 10). Prop 10, also known as the Local Rent Control Initiative would repeal the Costa Hawkings Rental Housing act and remove restrictions on the age and type of buildings that can be controlled by rent control ordinances. However, it also will ensure that those ordinances would not abridge a fair rate of return for landlords.
The Costa-Hawkings Rental Housing Act was passed in 1995. It restricted the types of buildings for which rent control could be implemented. Specifically, it stipulated that cities could not enact rent control on: housing occupied after February 1, 1995, and housing units like condominiums and townhouses where the title is separate from connected units. The act also provided landlords the ability to increase rent prices to market rates, determined by the landlord him or herself, when a tenant moved out (a policy called vacancy decontrol.)
Essentially, it allowed landlords of residential apartments and houses built after the law was passed in 1995 to raise rents as much as they wanted, despite local laws that could and would prevent those increases. Therefore, repealing this act would allow local communities to make decisions that would best benefit those citizens of those communities.
While the housing crisis across the country can feel like a daunting problem to solve, Prop 10 in California is an example where dedicated activists are using ballot initiatives to move our country forward.
Small steps can lead to better housing and better lives for our communities.