Tuesday, November 3, 2015

Rent Stabilization

The Voice on rent control, err, stabilization.  Warren Holmes initially came across as something of a crank candidate, and his lack of sensitivity on racial issues did not help his cause.  He did, however, raise various issues that seem to be often avoided in polite society in Takoma Park.  Such as taxes.  And the corresponding city services or lack thereof.  And rent control.  The Voice seems to suggest that the matter is an either/or situation with the choices being the city's rent stabilization plan that limits rent increases and the county's system of providing housing subsidies to residents that meet income requirements.  I assume that city residents are already eligible for the subsidies, so I don't necessarily see the dichotomy.  And housing subsidies don't necessarily ensure that affordable housing units exist in sufficient supply to meet eligible residents' needs.  One issue is the annual rent increase allowance, which is the maximum amount that landlords can generally increase rents per year.  The allowance is tied to the Consumer Price Index in the area and is currently 0.2% for this fiscal year.  This rate seems rather low and probably does not incentive reputable property owners and managers to invest in rental properties in Takoma Park.  Landlords can apply for a greater increase if they can show that they cannot earn an operating income with the general allowance, but I think that a lot of landlords would just prefer to defer or avoid maintenance rather than deal with the paper and city bureaucracy.  As a result of these combined forces, Takoma Park may be left with a disproportionate number of slumlords, who don't intend to provide maintenance let alone improvements and are content to try to extract whatever profit they can from their below market rents while their tenants inevitably suffer in terms of living conditions and services. 

I would think that most people would not object to the minimum rent increase allowance being set at 2% or 3% year.  That rate isn't exorbitant and isn't designed to drive residents from their homes, but it does allow for some investment and a greater chance of a reasonable profit.  I can understand the city's general desire to help renters through the variety of protections offered them, but I think that these well intentioned measures may have been set so far in one direction as to inadvertently create additional complications and problems.  As a result, the details of the programs' implementation may need to be reconsidered and recalibrated.

No comments:

Post a Comment