In a fit of sanity, the Florida legislature recently dealt a death blow to Miami Beach's two-year experiment in rent control. The legislators decided that control of rents - designed to save tenants from "rent gouging" by rapacious landlords - was in fact a progressive disease 1eading to urban decay.
A few other communities including Boston and Montgomery County, are also trying to undo rent control ordinances passed earlier in this decade. But across most of the nation, rent control is holding its own or gaining. New York has just extended a major portion of its program for four years. Rent control now exists in 105 New York and 80 New Jersey municipalities, Washington. Baltimore and three Maryland counties, several Massachusetts communities and various localities in Connecticut and Alaska. This year alone, it's been debated in such widely scattered cities on San Francisco, Seattle, Ann Arbor and santa Barbara.
Yet evidence continues to mount that rent control, however well-intentioned, distorts the operation of the free market and pits landlords against tenants while the supply of rental housing dwindles and deteriorates. Both in America and Europe, rent control has proven itself one of the bitterest fruits of government regulation.
Even opponents of rent control agree there may be special circumstances - wartime in particular - when placing a lid on rents is essential. The grave error lies in succumbing to political pressure from tenants to continue the controls when the emergency is over. And once a locality goes down the control road, "It's political suicide to repeal it locally," a Miami Beach city councilman told me.
Controls can keep rents down - but at a price, according to a comprehensive study of rent control in Europe and the United States just published by the Council for International Urban Liaison.
"Rent control is likely to have detrimental effects on the supply and maintenance of rental housing as great as any of the benefits to be gained particularly for low-income tenants," Washington lawyers Joel F. Brenner and Herbert M. Franklin conclude in the new study.
When landlords cannot charge rents high enough to cover fixed costs and provide a reasonable profit, Brenner and Franklin conclude, maintenance and repair are reduced to the barest essentials. The result: deteriorating housing and neighborhood blight.
In addition, the two lawyers report, rent control:
May worsen housing shortages by discouraging private investment in new units and encouraging present owners to convert rental buildings into condominiums or cooperatives - or in the worst situations, to abandon them.
Decreases a city's tax revenues - and thus its capacity to provide quality parks, schools and other services - because the taxable value of apartment buildings is based on rent receipts.
Helps many affluent tenants who have little or no need for protection, while sometimes missing poor people who live in smaller buildings that escape the regulatory net.
Keeps difficult-to-find large apartments out of the hands of growing families because older tenants are encouraged to remain in units much larger than they need.
Such arguments, similar to those advanced by landlord and realtor groups, cut little ice with tenant groups concerned about next month's rent. Politically, the pressures lead inexorably toward control.
When New York's Temporary Commission on City Finances recently recommended a rent-control phase-out, Mayor Abraham Beame - runnning for reelection - quickly turned thumbs down on the idea. Tenants, he said, needed "continued protection." The commission asserted rent control had depressed the quality - and thus the property-tax values - of a major portion of New York's housing stock, and that lifting controls would increase the strapped city's tax collections by tens of millions of dollars.
There is a theoretical case to be made for rent control. Housing is a fundamental necessity, it's said. In inflationary times a tenant can trim on some parts of his budget, but he can't refuse to pay his rent. Housing, proponents of control say, is a public good whose price should be regulated the same as any public utility.
And rent control is necessary, the pro-control argument goes, to prevent landlords from reaping excess profits when housing is scarce.
The problem with the rapacious-landlord arguments is that the rate of return in the industry isn't very high. It's so low in many cities that owners are abandoning their properties.
One reason rent control is so infernally hard to remove is that once controls are lifted, landlords inevitably rush to raise rents to profitable levels, causing immense hardships (because of the rapid increases) for blue-collar workers, the elderly and persons living on public assistance.
It's likely to be some time until the supply of rental units catches up with demand - particularly in today's world of sky-high interest rates. In Europe, the worst effects of rent control are generally alleviated by constant government construction of middle-and low-income housing. Subsidized housing in this country is minor in comparison.
There is some hope now for families in real need of housing assistance in the federal goverment's so-called Section 8 housing subsidy, which pays the difference between 25 per cent of their income and what's considered the fair rent for their area. The program - which has already financed 400,000 units, with HUD requests for 138,000 more in the next budget - ensures builders and landlords steady rent and lets to cope with inflation.
But even the Section 8 program won't help much if rent control prevents an expansion of the housing stock.
So the message for localities is crystal clear. For those with rent control phase out the program as quickly as possible. For those who haven't yet ventured down the primrose path of controls: Don't.