Landlords and tenants across the country are preparing for new rounds of fighting over rent controls, as the Reagan administration prepares to climb into the ring -- not as a referee but as a participant.
This doesn't mean, however, that there hasn't already been or will be a lot of room for compromise in the controversial arena of rent control. Spokesmen for landlord and tenant groups and government officials who administer rent control agree that the major stumbling block to an equitable solution is the tendency for all sides concerned to employ extremes in defense of their positions.
In New York's South Bronx, for example, some landlords have blamed the deterioration of the area solely on rent control; others say the controls are only part of the problem. To highlight the ridiculous nature of the controls, they point out that there still are some "apartments" in New York's ultra-posh Plaza Hotel under rent controls imposed during World War II.
Tenants groups, meanwhile, counter that many poor and elderly people would no longer be able to afford to stay in their apartments should rent controls be lifted.
New York City Mayor Edward I. Koch, adding fuel to the fires of extremism, said that if controls were lifted in New York the rents on nearly a million "rent-stabilized" apartments "would double."
But a deeper look at some rent-control programs around the country shows that many efforts are being made to find compromises:
Washington, D.C. The District of Columbia has roughly 123,000 rent-controlled apartments. As in New York, Los Angeles and other cities, many landlords say that controls are leading to abandonment of buildings that are in bad shape, though District rental authorities say the abandonment rate is quite low.
But last November, under pressure from owner groups, the City Council here passed on ordinance, to become effective on May 1, permitting landlords of units that become vacant to raise rents 10 percent once a year (or to the highest rent on a comparable rent-controlled unit in the same building, up to twice a year.) Currently, the increase allowed upon vacancy is 3% or up to the rate of a comparable apartment.
The new rules also will liberalize the formula by which owners can recoup capital improvements costs through rent increases, because it was felt that the old formula went unused because of unrealistic requirements.
District landlords also have available "hardship" petitions for getting larger rent increases if they have had a low rate of return or a negative cash flow on the controlled units.
Dorothy Kennison, the District of Columbia's rent administrator, says "many landlords are happy with our rent-control law, because . . . they can claim that the increase is backed up by the District."
Boston. This city has approximately 45,000 to 50,000 rent-controlled apartment units, down from about 110,000 four years ago. Here the "compromise" between landlords and tenants has taken the form of a 1976 amendment to the city's original rent-control law, which took effect three years earlier. This amendment, called "vacancy decontrol," removes an apartment unit from rent controls when that apartment becomes vacant.
Although this relaxation has made some landlords a little happier, "it still is too early to tell" if vacancy decontrol will prod a great many more landlords to fix up their buildings, one of its chief aims, says Bernard Shadrawy Jr., who heads this city's rent-control office. "So far, there hasn't been an appreciable increase, not that some haven't fixed up their buildings," he said.
Thousand Oaks, Calif. This affluent community -- about an hour's drive from downtown Los Angeles -- adopted rent control for all apartment houses of five units or more last year. The reason: like leaders in dozens of other communities around the country, city officials felt rent increases were exorbitant -- capitalizing on an increased population and a housing shortage. And on election day last November voters rejected a bid to lift the controls.
But James Lontin, city attorney for Thousand Oaks, says he believes the existing three-year ordinance won't need to be extended because it addresses only a short-term housing problem. In the meantime, he adds, the ordinances give landlords an automatic 8 percent a year increase, and more if landlords persuade authorities there is a genuine need.
New York City. The Big Apple has more rent-controlled units than any other city. Half of the city's 2.5 million apartment units are controlled, but 340,000 of these are under rent controls imposed during World War II. The remainder of the controlled units are under the city's rent-stabilization law, passed in 1969, and their rents go up a certain percentage every year, depending on energy costs and other landlord expenses.
Harry Helmsley, a landlord with large real estate holdings in the city, says that New York's so-called "rent stabilization" policy is a major problem, too, and has brought apartment construction to a virtual halt. His main opposition to this form of control is that it doesn't permit landlords to earn a fair return on their investment. "It makes no sense in this city to build rental units," he said.
Yet some rental units are being built in New York.
In the future, it appears, landlords like Helmsley will be looking to a Reagan White House for help in striking a compromise over rent-controlled regulations.
"I think it [elimination of rent control] could happen on a nationwide basis and that probably a compromise could be worked out on some phasing in over a period of years," Helmsley said.
President Reagan's urban-policy task force during the transition recommended the elimination of rent control with a provision, such as cash vouchers, to help the poor and the elderly unable to absorb rent increases that the ending of controls would bring.
This call for government subsidies, in vouchers or whatever form it takes, appeals to landlords. The National Multi Housing Council, a lobbying group representing anti-rent-control advocates on Capitol Hill, has endorsed government subsidies for poor people but hasn't decided if a voucher system is the best way to do it.
For his part, Reagan has not decided which way to go on rent controls. It was not a campaign issue. But, clearly, in the atmosphere of deregulation that may dominate Washington under the Reagan administration, movement away from rent controls through federal action is a possibility.
A Reagan administration "creates a climate whereby the elimination of rent controls becomes possible where it wasn't under the Carter administration," said a spokesman for the Multi Housing Council. Proponents of federal action against rent control say the easiest step for Congress would be to withhold federal housing subsidies from communities which regulate rent. A proposal of this type initially was approved by Congress last summer. But the bill, which would have denied housing subsidy money to communities with rent controls on newly built units, was attached to a larger measure which failed.
While Mayor Koch and rent-control advocates promise to be in the forefront of steps to try again for a compromise, the tide seems to be turning against them.