Earlier this week, the DC Council voted to cap rent increases on rent-stabilized units in the District at 6% for the next two years, starting July 1. The vote marked a compromise between competing viewpoints within the city. In February, the Rental Housing Commission approved an 8.9% cap on rent-stabilized apartments, a dramatic increase from the 6.2% limit in 2022. Affordability housing advocates pushed back, promoting a 5% cap.
DC's rent stabilization program was enacted in 1985 under the Rental Housing Act. It only applies to units constructed prior to 1975. Under the Act, rent for applicable units can be increased each year by the lesser of (a) Consumer Price Index plus 2%, or (b) 10%. This year, that number would have been 8.9%, as approved by the Commission. However, given proposed budget cuts to rental assistance as well as persistent inflation, advocates were concerned about the effect on low-income tenants. On the other side, organizations representing property owners expressed concern that landlords, also impacted by inflation, would be overly burdened by an even lower rent cap.
Many jurisdictions beyond DC, including New York City, limit the applicability of rent control to units built prior to a certain date. As a result, rent-controlled and rent-stabilized units have become prized possessions. Critics argue that rent control policies create scarcity, driving up rents and discouraging tenants from leaving units, even if the apartment is no longer practical. In an episode of the podcast Freakonomics, economist Ed Glaeser cites an example of a widow living alone in a 3-bedroom rent-controlled apartment that she moved into three decades earlier as part of a family of five: "…my goodness, why would you ever move out?" However, proponents maintain that rent control is key to addressing displacement concerns of longtime residents. Rents are skyrocketing in cities across the country, especially as highly educated workers relocate in the aftermath of the pandemic.
The DC Council's debate and ultimate compromise reflect the complexity of this issue. It is important to protect existing renters, but it is equally important to promote development to ensure new residents do not face diminished supply and overly inflated rents.