Metro, News

Local advocacy group pushes rent control

Direct Action for Rights and Equality hopes to establish right to year-long lease, limit rent increases

By
Metro Editor
Thursday, March 8, 2018

Direct Action for Rights and Equality protestors held broken hearts to symbolize the need for affordable housing in Rhode Island.

After a childhood littered with eviction notices, Providence native Franklin Rivera began adulthood by moving into an apartment last year — and was promptly faced with a leaking roof, hazardous electrical outlets, an unresponsive landlord and the burden of filing a lawsuit. The apartment is so “unlivable” that Rivera has sued his landlord for “not maintaining the apartment and not having a habitable house to live in,” he said.

But the lawsuit may very well prove fruitless for Rivera; his lease is month-to-month, which means the landlord could choose to evict him at any time during the process with only 30 days notice.

Direct Action for Rights and Equality is hoping to support Rivera and other renters like him by putting rent-stabilization on the Providence ballot this fall, DARE advocates announced at a press conference in February. The initiative would establish the right to a year-long lease and enact regulations that allow rent to increase only once a year and by no more than four percent, said Christopher Samih-Rotondo, community organizer for the Tenant and Homeowner Association at DARE. It would also set up a rent board to publish annual reports on Rhode Island property and mediate disputes between landlords and tenants, he added.

In order to make it on the city ballot in November, the initiative must collect at least 6,000 signatures from Rhode Island residents. DARE plans to submit the first 1,000 signatures in the next two weeks, Samih-Rotondo said.

The rent-stabilization campaign comes as more and more renters enter the private housing market in Providence, said Steven Fischbach, supervising attorney for Rhode Island Legal Services Housing Law Center and Foreclosure Prevention Project. The hike in renters follows a foreclosure crisis that dominated the city in the mid-2000s, when high-interest, flexible and non-sustainable loans made it nearly impossible for homeowners to maintain their homes. As a result, many homeowners became renters, Fischbach said.

“Former homeowners have been pushed into the private rental market. …  And the rental market is not set up to absorb them,” Fischbach said, adding that poor credit statuses caused by the crisis make it difficult for potential renters to borrow money.

The large volume of foreclosures created an excess of relatively low-price housing for investors to purchase, which often forces residents out of their homes to make room for businesses, Fischbach said. For instance, the Trottier family at 40 Grove St. in Federal Hill is facing eviction after the local rental business Providence Student Living purchased the three-family house to lease at a higher price to students, The Providence Journal reported.

Rent control would help mitigate the consequences of increased rent prices and investment presence, but the city needs to do more, said Betsy Stubblefield Loucks, consultant for Rhode Island Alliance for Healthy Homes.

“Rent control is certainly a part of the picture of creating more affordable housing stock, but another huge part is healthy housing,” Loucks said, adding that Providence housing stock is one of the oldest in the country and often comes with lead and insulation issues. “We can’t just look at these short, quick fixes without a bigger, broader process.”

There is also concern among housing advocates that rent control could lead to the exclusion of certain communities in areas that are more desirable to live — landlords tend to try to give apartments with “good deals” to friends and family, she added.

In addition to DARE’s efforts, nonprofits and legislators in the state are working to address concerns around affordable housing.

The Housing Opportunities Initiative, a Housing Network of Rhode Island project, is designing a ten-year strategy to respond to the concerns around affordable housing in Providence, Loucks said. The State House has scheduled a hearing to discuss trusts and services for children around the state, she added.

5 Comments

  1. TheRationale says:

    Hard to stomach that people still believe in rent control, an idea that’s been universally condemned by economics across the board from Paul Krugman to Milton Friedman. Rent control creates housing shortages, it doesn’t solve them. I hope for everyone’s sake this proposal is swiftly rejected.

    • Christopher Samih-Rotondo says:

      I would like to see some evidence to back up this “supply-side” argument. Landlords derive profits from control of a market, that fluctuates based on taste. The return to the urban core of white, monied folks following decades of retreat to the suburbs and student rentals being the biggest factors driving local gentrification.
      This report from the Bay Area, where rent stabilization and control have been law for three decades, provides actual evidence that housing construction and supply is affected more by the ability to borrow, construction costs, and zoning laws than rent control. http://urbanhabitat.org/sites/default/files/UH%202018%20Strengthening%20Communities%20Through%20Rent%20Control_0.pdf

      Every industry complains about regulations that protect human rights. In the end, people must be protected from an unregulated capitalist market.

      • TheRationale says:

        Christopher – Evidence is the consistent and remarkable reliability of evidence supporting the argument. It’s literally the textbook case of why price controls are bad, since it’s in all of them. Economists hem and haw over the minimum wage, but not rent control.

        Institute a price ceiling, and you create a shortage of supply and a surplus of demand. Insofar as the price control is actually effective, new investment in rent-controlled housing stops immediately, since everything above the rent-controlled rate is now illegal. This creates deadweight loss, and leads to precisely the opposite of what you’d want – less investment in housing, not more. Landlords convert their holdings to luxury dwellings or corporate spaces, both usually exempt from rent control.

        Sweden’s rent control policy was famous – they created a housing shortage lasting years despite the highest rate of government-built housing in the world. New York is is also famous for celebrities and politicians living in tony rent-controlled apartments even to this day.

        The Bay Area (Silicon Valley) has one of the worst housing shortages in the nation – small 50-year-old houses are now going for well over $2M. There are multiple policy diseases affecting the area, such as the ones you listed, although rent control can’t be expected to lead the pack since it’s not an issue through the entire area, since Mountain View only just passed rent control in the last election. But to your point, the Bay Area has seen a remarkable number of evictions from rent-controlled apartments, since landlords are losing money (if not absolutely then through opportunity cost). They either exit the rental business or convert their holdings to non-rent-controlled spaces. In other words, insofar as rent control has been implemented, it has caused a direct, quantifiable decrease in housing supply. This is what the standard model predicts.

    • Of course DARE wouldn’t dream of anything resembling property tax control.

  2. Keith Fernandes says:

    I
    have zero problems with rent control just as long as you have Tax
    control, Providence Water control, Narrangansett Bay control, National
    Grid control, Insurance industry control, Electricians Plumbers and
    Contractor Control and finally tenants paying rent on time control.

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