Rent caps, which set limits on permissible rent charges or cap annual rent increases during tenancies, have been adopted by many cities as a way of curbing rising rents. But do rent caps actually work? Do they keep city rents affordable? Or are they part of the problem?
Rent caps keep rents affordable and prevent displacement.
Rent caps keep rent affordable
Rent caps ensure that rents do not increase at a higher rate than wages, elevating everyone's quality of life.
Rent caps prevent displacement
Rent caps prevent families from being forced out of communities because of rising rents, promoting neighbourhood and community diversity.
Rent caps reduce political friction
Without rent caps, urban planning often comes up against stiff local resistance.
Rent caps fail at their basic function of keeping rents affordable.
Rent caps reduce the number of properties available to rent
Lower returns of investment de-incentivize letting and prompt many landlords to sell their properties for market value rather than accept rent below market value.
Rent caps lead to poorer quality rental units
Rent caps reduce landlord returns on investment. This leaves less cash on hand for home improvements and property maintenance.
Rent caps accelerate gentrification
Rent caps incentivize the construction of new builds to avoid limits, leading to more properties being demolished to make way for swanky new rental properties.
Rent caps disadvantage new renters
Rent caps overwhelmingly favour existing renters and disadvantage renters entering the market.
Rent caps leads to a renter mismatch
Rent caps lead to families holding onto properties that are bigger than they need, reducing rental opportunities for young couples with expanding families.
Without additional legislation, rent caps are irrelevant.
Rent caps are irrelevant without eviction protection
Without eviction protections, rent caps are useless. Landlords can circumvent the rent cap by simply evicting the current renter and replacing them with a higher-paying tenant.
This page was last edited on Monday, 20 Apr 2020 at 11:41 UTC