Rent Control in 2024
BY: Francis Figueroa
Today, over 200 local governments have a rent control policy in place. A proponent of rent control would replace “over” with “only.” The policy garners much attention and debate. Before discussing the most recent news regarding rent control, one should understand what rent control legislation typically looks like.
Rent control is most often accompanied by two significant features – both of which are at the center of the debate between advocates and opponents. The two features include:
- The local government restricts rent at a particular price for given properties. What and how the rental amount is capped is determined using a combination of factors, including the initial rental price, property characteristics, and local regulations.
- Next, the government requires the owner of the property to extend lease[s] with a tenant at a restricted price.
The United States does not have a federal rent control policy; only roughly 200 local governments have such a policy. Thus, state and local governments set rent control policies if not preempted by state law. Massachusetts state law disallows cities or towns from setting forth a rent control policy. Other states, such as New York, allow towns or cities within the state to implement a rent control system if certain conditions are met.
Recent Litigation
Recent judicial decisions—most notably a case brought forth in the Second Circuit — have shed light on the ongoing issues regarding state rent control policies.
Plaintiff-Appellants, “individuals who own apartment buildings in New York City subject to the relevant Rent Stabilization Law (RSL),” petitioned for writs of certiorari from the Supreme Court.. The petition was only sought after the Second Circuit held for various defendants of the State of New York. The plaintiffs alleged that the Rent Stabilization Law was unconstitutional, both facially and as applied, and thus constituted a physical and regulatory taking. The Second Circuit dismissed the complaint per Rule 12(b)(6); reasoning that the property owners voluntarily invite third parties to rent their space to which different property rules and regulations apply. Plaintiffs, who may have expected this outcome, took the opportunity to ask the Supreme Court to hear their constitutional claims.
On February 20, 2024, the Supreme Court denied certiorari and Justice Thomas commented that the petitioner’s complaints were mostly “generalized allegations about their circumstances and injuries.” Justice Thomas added that it was unclear how the RSL bars landlords from evicting residing tenants. Justice Thomas did acknowledge, however, how pressing of an issue the claims are and that a future case should grant certiorari to address the relevant question.
Key Sources
Rent Control: Policy Issue, National Apartment Association, (Apr. 6, 2024), https://www.naahq.org/rent-control-policy#:~:text=As%20of%202022%2C%20over%20200,rent%20control%20policy%20in%20place
Patrick Freeze, Understanding Rent Control: How It Affects Rent Increases, Bay Property Management Group, (Apr. 5, 2024), https://www.baymgmtgroup.com/blog/understanding-rent-control/#:~:text=Some%20rent%20control%20systems%20set,property%20characteristics%2C%20and%20local%20regulations.
Christian Britschgi, The Best Hope to Rein in Rent Control is Lurking on the Supreme Court’s Docket, (Apr. 5, 2024), https://reason.com/2023/11/06/the-best-hope-to-rein-in-rent-control-is-lurking-on-the-supreme-courts-docket/
74 Pinehurst LLC. v. New York, 59 F.4th 557, 563 (2nCir. 2021).
74 Pinehurst LLC. v. New York, 59 F. 4th 557 (2d. Cir. 2023), cert denied, 2024 WL 674658