The Post has recently opposed rent control in an extraordinary number of editorials. It has offerd me an opportunity to defend the legislation introduced by D.C. Council members Mason, Rolark, Shackleton, Smith, Wilson and myself, and I appreciate it.
The Post and others who have voiced opposition to rent controls have been quick to blame controls for housing problems common in all older cities, including those without such controls.
The Post argues that rent control has done nothing to stimulate expansion of the rental housing stock and, consequently, it should be eliminated. The expansion of the city's housing stock is an important governmental objective and has received significant attention in recent years. The council created the Housing Finance Agency, established lower tax rates for residential and rental properties, enacted legislation to adopt uniform regional building codes, appropriated millions to support housing development and adopted a Comprehensive Plan with a commitment to housing.
Rent control is intended to address a different but equally important issue -- the affordability of housing. According to a 1985 Department of Housing and Urban Development study, the 1984 rental housing vacancy rate was 2.4 percent in the District. Without government intervention in the private market, the price of housing would soar beyond the means of many low-and moderate-income households.
Part of the great beauty of Washington is its harmony in diversity. Part of the ability to maintain this harmony is the presence in many neighborhoods of persons of diverse economic and ethnic backgrounds.
Anthony Downs, cited by The Post as an expert witness, testified before the council that the result of decontrol would be that the rich would maintain their presence in "better" neighborhoods and the poor would migrate to others. I have seen this happen in rental housing.
A rent subsidy program has been touted as the best means to help households in need of assistance. Although there is no disagreement on the council about the advisability of a rent subsidy, the city is nowhere near being ready to rely upon such a program as its sole means of ensuring affordable housing for those in need. The council has added $5 million to the 1986 budget for a rental subsidy, and the mayor has committed himself to $15 million for 1987. But Congress has thus far approved nothing. In a previous budget, it disapproved such a subsidy program. It will take considerable time to structure the program, to identify the persons who may be eligible and to estimate the ultimate cost accurately.
Rent control has been said to result in deteriorating conditions. This argument ignores the provisions in the current law and in my bill that provide for rent increases based on capital improvements, substantial rehabilitation or the apartment improvement program. It ignores the provisions that guarantee an owner a 10 percent return on equity (often larger than investment) and that allow maintenance costs to be taken as expenses in computing that return. It ignores far worse conditions existing in cities without rent control. And it ignores the plainly evident fact that, to the credit of landlords and tenants alike, most of the city's rental units are indeed decent, safe and sanitary.
It has been said that the exemptions in the current law for new construction and for properties vacant since 1980 have had no effect inasmuch as there has been little activity in these areas. This argument ignores other factors that are very relevant to investors' decisions, such as interest rates, relative construction costs and boom opportunities.
Until recently, interest rates have been hgh and there has been a boom in office- building construction in the District. Now that the interest rates have come down and the office boom is over, we are seeing an increased interest in the purchase of vacant buildings, which, all agree, offer far more potential for new housing than does new construction. If there are those in the marketplace who, despite the city's continuing commitment to these exemptions, are boycotting the District, The Post should share the benefit of its critical perspective with them as well.
It has been pointed out quite frequently that rent control helps the rich as well as the poor. However, vacancy control, the medicine offered to cure this malady, aggravates it instead. Two "expert" witnesses appearing at committee hearings and previously quoted by The Post, Downs and Peter Salins, both agreed that experience in other jurisdictions shows that the well-to-do tenants tend to remain in their units longer than those with greater need. Thus vacancy decontrol is likely to result more in controls for the rich and decontrol for the poor.
It has been said that rent control results in an inequitable tax burden by depressing the value (and therefore the assessments) of rental properties. This argument ignores two very important facts. From 1980 to 1985, assessments for rental residential properties increased by 58.1 percent compared with 51.2 percent for owner-occupied properties. In addition, the owner of rental property pays property taxes at a rate of 1.54 percent while homeowners pay at a rate of 1.22 percent after deducting $9,000 from the assessment.
Rent control has not solved all of the District's housing problems, but it was never said that it would. It has made housing more affordable for tenants who need this protection, and, for that reason, should be retained.