Is the clock ticking for rent control? Many signs now say "yes."
During the inflation-racked 1970s, rent control spread rapidly to more than 200 communities as mayors and councils looked for a way to stop rapid-fire evictions of low-income tenants.
But in the 1980s, the expansion stopped dead in its tracks. One factor was that rents ended their meteoric rise with the end of the energy-driven inflation of the 1970s. High energy costs had forced many landlords to raise rents rapidly.
The apartment industry also got busy. It not only fought rent control city by city, but successfully lobbied state legislatures to forbid cities from enacting rent control in the first place.
From an early 1977 victory in Florida, when a rent control effort in Miami Beach prompted Florida legislators to act, so-called state preemption laws, forbidding or invalidating local rent control, have spread to 16 states.
Rent control advocates say few of these states were inclined to control rents anyway. But this year, the National Apartment Association and the National Multi-Housing Council are targeting 29 more legislatures -- Illinois, Indiana, Connecticut, Ohio, Pennsylvania and Virginia among them.
Their toughest problem is to overturn rent control when it's entrenched in a city, as it is in the District of Columbia. Officials fear severe political retribution from tenant groups if they try. Few repeal actions have been reported in the five big rent-control states -- California, Maryland, Massachusetts, New Jersey and New York.
The damning up of rent control through the 1980s was due to more than landlord agitation. Classic regulatory liberalism took its political lumps in the Reagan era, and even now shows little life.
In 1987, the rent control cause got hit with a new, damaging charge: that it adds to massive homelessness in cities. Conservative writer William Tucker found that cities with rent controls have, on average, 2 1/2 times as many homeless people as cities without them.
Critics have argued with Tucker's study method. But the circle of rent control detractors has expanded from the political conservatives and classical economists to the center of the political spectrum.
Consider the rent control study Brookings Institution economist Anthony Downs did recently for the Urban Land Institute. In the absence of wartime-like conditions, Downs concluded, rent controls have few justifications. They may, he said, provide "short-term benefits" for some low-income renters. But strict controls discourage new construction and maintenance, he said, and reduce the overall supply of rental housing.
Rent control's chief beneficiaries, Downs said, are often middle-income people lucky enough to be in protected units.
In Berkeley and Santa Monica, Calif., where controls are among the country's most stringent, one study found its beneficiaries are "predominantly white, well-educated, young, professionally employed and affluent" -- while rent control "exacerbates" the problems of low-income families.
Downs found many apartment owners "subsidize tenants who are better off them themselves." To help poor people, he argues, direct government rent subsidies are the efficient, sensible way to go.
Rent control's friends are not about to take all this lying down. "The case against rent control is a fraud," John Atlas, president of the National Housing Institute, and Peter Drier, Boston Redevelopment Authority housing director, argued recently in The Progressive. Rent control, they wrote, "helped slow down gentrification, curbed displacement of poor and working-class families," and protected vulnerable neighborhoods where "the invisible hand often carries an eviction notice."
Rent control simply "limits unbridled rent-gouging and real estate speculation," while allowing apartment owners "a reasonable profit," wrote Atlas and Drier. They also suggest some politicians oppose rent control for less than savory motives -- namely, "to curry favor with campaign contributors from the real estate industry."
Perhaps so. But in Washington -- where Ronald Reagan wanted to bar all federal housing aid to cities with rent control -- the level of skepticism about controls remains and may be growing. Housing and Urban Development Secretary Jack Kemp evangelizes against rent control as a local regulation choking off the low-income housing supply. Kemp wants "housing opportunity zones" -- a bit like enterprise zones for commerce -- in which cities would get special federal aid for such steps as relaxing rent controls.
On Capitol Hill, early versions of the omnibus housing-reform legislation pushed by Sens. Alan Cranston (D-Calif.) and Alfonse D'Amato (R-N.Y.) even authorized Kemp to withhold federal housing funds from cities with rent control unless their governments produce evidence showing the laws don't make things worse. Now the Senate bill-drafters are backing off that idea, not for love of rent control but for squeamishness about yet another set of federal orders imposed on localities.
There's a deep irony about rent control. Local politicians invented it to keep poor people housed -- at the landlords' expense. National politicians are considering putting it to death through a federal mandate -- presumably cost-free to Uncle Sam.
But the real problem is that we have millions of poor who simply can't pay the rent. Eventually somebody has to pay. And it won't be free.