There are many things out of one’s control. The weather comes to mind, as does the inevitable cost of living, which often seems like it only knows one direction: up.
The latter is one reason why rent control — prohibited in Illinois since 1997 — is being discussed in Chicago communities and political circles.
In 2017, Chicago renters making the median income spent more than half their workdays earning enough money to cover the rent, according to ananalysisfrom HotPads, an apartment search platform.
Anotheranalysis, from apartment search site RentCafe, found that between 2006 and 2016, almost a quarter of the 100 largest cities (by population) in the United States shifted from owner- to renter-majority. Chicago’s one of those that shifted. Even though there are still more owners than renters in some cities, the growth of the renter population outpaced homeownership in 97 of the 100 largest cities — Chicago included.
“If you ask people: Do you agree that there should be a limit on how much rents can change in a given year? In Chicago, 74 percent of respondents agreed with that statement. Not surprising,” said Aaron Terrazas, senior economist with real estate website Zillow, citing data from a September 2017 survey of approximately 500 Chicagoans.
“You do hear a lot about (rent control) a lot more because rents have gotten so high and rent affordability has deteriorated to the extent where people are really worried about how are they going to cope with rising housing costs. Are they going to be able to stay in their communities as long as they want? It’s a very real and tangible concern.”
Real and tangible, indeed, for theLift the Ban coalition, a bloc of community groups that has been leading a two-year campaign against Illinois’ ban on rent control. The group is pushing for a repeal of the state’s 1997 Rent Control Preemption Act, a law that prohibits municipalities from enacting any form of regulation on residential or commercial rent prices.
“Because of the preemption act, it’s essentially illegal for any municipality to explore the idea of regulation,” said Jawanza Malone, Lift the Ban leader and executive director of the Kenwood Oakland Community Organization. “It just doesn’t make sense. The food we eat is regulated; there are environmental protections. Why is it that rent isn’t regulated? We’re just advocating for economic well-being for all of our communities.”
John Joe Schlichtman, an associate professor in the sociology department atDePaul Universityand co-author of the book “Gentrifier,” considers the state ban on rent control “silly.”
“There is no reason that this tool should be unavailable to local policymakers along with others that exist, such as the Affordable Requirements Ordinance,” he said. “There is a coalition of people across incomes who want to see tools like rent control used to sculpt a particular kind of community, not merely the one investors leave in their wake. Such robust communities will only increase future investment.”
The coalition’s efforts have already resulted in a question about rent regulation slated for the March primary ballot in nine wards and about 100 precincts around Chicago, Malone said. Couple that with state Rep. Will Guzzardi, D-Chicago, introducing abillto the state House last year repealing the rent control ban and Democratic gubernatorial candidatesJ.B. Pritzker and Daniel Biss expressing support of a repealand you have a number of people optimistic about the repeal coming to fruition.
“I have no doubt that it will come to fruition,” Biss said. “I think the really hard question is, How soon? If there’s a great grass-roots effort of people across the state who see this affordable housing crisis and understand that communities should have the right to make their own decisions about how to tackle it, I think we’ll win.”
According to Byron Sigcho, a member of Lift the Ban coalition and director of Pilsen Alliance, a social justice and anti-gentrification organization, rent regulation could stem the tide of displacement and gentrification that is happening in his neighborhood.
“We need to refine the narrative and move legislators to understand rent stabilization is going to help the average Chicagoan,” he said.
But rent regulation is not a tool that many economists and realty professionals want to pull out of the tool kit. In fact, Brian Bernardoni, senior director of government affairs and public policy for the Chicago Association of Realtors, likens it to “throwing a hand grenade on your lawn to get rid of dandelions.”
“This is a ‘good politics, bad economics’ kind of discussion,” he said. “If you just introduce a rent control provision, but don’t look at property taxes, don’t look at building codes, don’t look at density, it blows up everything and that’s why we’re unequivocally opposed to it in Springfield.”
While Terrazas said rent control would aid a long-term renter who never expects to move, the economist agrees with Bernardoni that rent control is not the answer.
“Overwhelmingly, the econometric evidence” — that is, applying statistical methods to economic data to test hypotheses — “suggests that rent control causes renters to move less, it disincentivizes investment in rental construction and new rental building and ultimately raises rents for renters,” Terrazas said. “The disincentive to add new units ultimately increases rent, so rent control is very much a response that benefits people who have been in a community for a long time at the expense of the overall community — at the expense of particularly young people who are trying to move out and form their own households, so it really very much is prioritizing one community over another.”
Bernardoni suggests better alternatives to rent control involve building more affordable housing, increasing density in areas and offering a building code that’s less expensive but still doesn’t skimp on safety.
“There are more effective ways to create a more balanced, equitable marketplace than capping rents,” Terrazas said. “There’s a lot of evidence that vouchers and providing renters assistance so they can keep up with the private market are very effective.”
It’s also crucial, he notes, to empower renters to “advocate for good building conditions and … report building mismanagement when there’s a clear violation of health or safety standards — I think those kinds of rules tend to be more effective than capping rent growth.”
Regardless of whether you’re for or against rent regulation, Biss said the discussion of rent control in Illinois is inevitable.
“This is a real opportunity to say we don’t have to have the state tell communities they’re not allowed to keep neighborhoods affordable,” he said. “It’s a decision to make together.”
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