Rent control is a hot topic among investors and landlords alike, Motley Fool [1] reports, as many states have rent reform as a top priority. According to Motley Fool, California and New York have followed Oregon’s lead in creating new rent control rules this year, after Oregon became the first state to have statewide rent control in 2019.
“Rent reform varies from state to state depending on the economy and the type of rental stock. But rental rules tend to center around two key issues: rent increases and eviction protections for tenants.”
Oregon’s new rules capped rent increases at 7% plus inflation during any 12-month period. Each year, the rent increase cap will be set by state economists. The new laws also change the rules for no-cause evictions. Renters who have lived under a month-to-month lease for over a year are protected and the state requires a 60-day notice from the landlord. A 30-day notice is necessary for those who have lived in the unit for under a year.
In New York, there are two ways that New York City restricts what landlords can charge: rent control and rent stabilization. Landlords could also increase rents by as much as 6% for improvements that benefitted all tenants, but that has now been limited to 2%.
California recently passed California Assembly Bill 1482, which includes compromises on a few key issues. The rule excludes cities that already have rent ordinances. That happens to include the two largest cities, San Francisco and Los Angeles. California holds some of the highest percentage of single-family rentals in the country, according to the 2017 American Community Survey.
Merced (59.7%), Visalia-Porterville (53.8%), Modesto (53.2%), Stockton-Lodi (52.4%) and Bakersfield (51.7%), all in California, had the highest concentration of homes for rent according to the study. In fact, these cities also had the highest number of foreclosures during the Great Recession. The study revealed that these numbers indicated "an association between areas with high foreclosure rates and detached rental units."
“Even if rent control isn’t an issue in your community yet, it may be coming,” Motley Fool notes. “For landlords, it’s always important to stay aware of what's happening in your community. Pay attention to the local news where your rental is located and attend town meetings if possible. As a real estate investor, you can make your voice heard.”