2023 has marked another substantial chapter for the U.S. rental industry, with rent control legislation often taking center stage in state and federal arenas. As a leading data provider in data pertaining to the tenant screening sector, we’ve meticulously followed these developments to gauge their implications for our clients, and in turn, for landlords and property managers.
Trends in 2023’s Rent Control Legislation
Historically, rent control has been a contentious issue, with proponents arguing that it protects tenants from sudden rent hikes and opponents pointing to its potential stifling of the real estate market. In 2023, the pendulum seems to have often swung in favor of rent control, albeit with nuances across states.
Multiple states have brought forth bills advocating for stricter rent controls, and while some have seen success, others have faced stiff resistance. States like California and New York, already no strangers to such measures, have leaned further into stricter controls, aiming to limit rent hikes to a more stringent degree via bills such as AB 1482 requiring “just cause” to terminate a tenancy in California, and AB A4255 for small business rent stabilization in New York. Meanwhile, traditionally conservative states have largely continued their hands-off approach, with proposals sometimes failing at the committee stage.
Oddball Rent Control Bills
No legislative season is complete without its fair share of unique bills, and 2023 was no exception. For example, an intriguing proposal in Oregon via SB 611 aimed to cap year-to-year rent increases to 3 percent plus inflation or 8 percent total, whichever is lower. The bill would also close the rent control exemption from buildings built within the last 15 years to buildings constructed in the last three years, as well as increase the relocation support fee (the amount of money a landlord must pay a renter for a no-cause eviction) to three months of rent. In Oregon, only one rent increase may be issued in any 12-month period. The bill was signed into law on July 6th, and thus the allowable rent increase percentage for 2023 was 14.6% if the increase was issued before July 6th, or 10.0% if issued after July 6th.
Implications for the Rental Industry At Large
From CIC’s vantage point, while these rent control legislations can pose their share of challenges, they also present many opportunities. As a data provider, our role extends beyond mere data collection to offering accurate, timely, and actionable insights for our clients.
- Dynamic Data Requirements & Increased Demand for Granular Insights: With the fluctuating landscape of rent control, the need for real-time data has skyrocketed. Landlords and property managers are on the lookout for the latest rent control guidelines in their jurisdictions. This necessitates agile data processing and dissemination systems and resources, such as our regulation map, to cater to the ever-evolving nature of the industry. Rent control often varies not just state-by-state but city-by-city. This micro-level variance means our clients require data that is granular, breaking down rent control norms by state, and even major metros.
- Risk Management and Compliance: For our clients who build products or solutions for landlords and property managers, understanding the intricacies of rent control is pivotal. The costs of non-compliance can be hefty, both financially and reputationally. Thus, our data must be robust and comprehensive to ensure clients stay within legal bounds.
- Innovation and Adaptation: While rent control presents hurdles, it also drives innovation. For instance, property managers might look to enhance the value they provide beyond just the living space. Enhanced amenities, community-building initiatives, or tech-driven solutions can offset some of the constraints rent control introduces. This shift places an onus on our clients and, by extension, on us to supply the data that helps identify and tap into these emerging trends.
In conclusion, 2023’s rent control legislative spree underscores the critical role data plays in today’s rental industry. As regulations evolve and adapt, so must the strategies of property owners, property managers, and the broader ecosystem. Our commitment is to stay at the forefront, equipping you with the insights you need to navigate these choppy waters.