Frequently Asked QuestionsBy PRCC Research, March 1, 2022
What is rent control?
Rent control is legislation that limits how much landlords can increase the rent for their properties year to year. The goal is to keep affordable housing affordable and to prevent forced displacement caused by unreasonable rent increases. Philadelphia has no rent-control law yet, meaning there is no limit to how much a private landlord can increase the rent by. If your landlord wants to double or triple your rent, they are free to do so.
When strong good cause eviction protections are in place, your landlord can’t kick you out without a justifiable reason. Without rent control, though, they can just increase your rent to an amount they know is unaffordable, forcing you to move. Although this isn’t considered an eviction, it is a form of displacement.
Are rents in Philadelphia increasing?
Yes. Even before the pandemic, Philadelphia had some of the most quickly-increasing in the country -- paired with some of the slowest income growth (source). In 2014, the median rent for a 1 bedroom apartment in Philadelphia was about $1000 per month.
Now, rent has increased to almost $1400 per month (source - Zillow).
Nearly all neighborhoods in Philly are feeling the effects of rent hikes. But intense increases are particularly occurring in North Philly especially around Strawberry Mansion and Brewerytown, as well as in Point Breeze, Fishtown, Frankford, Manayunk and Mantua.
How many Philadelphians struggle to pay their rent?
Rent is considered unaffordable when it takes up more than 30% of a household’s income. Based on census data, about 60% of Philadelphians cannot afford their rent.
For lower-income renters, the situation is even more dire. 72% of lower-income renters can not afford their rent (source). The vast majority of these households are people of color, especially Black renters. Moreover, affordable rental housing is out of reach for the majority of renters with a disability, or those that have children, or senior renters. (source)
Summary stats (except where noted, source):
- 61% of all renters can’t afford their home (Source: US Census 5-Year Estimates for Table B25106).
- 72% of all lower-income renters can’t afford their rent.
- Renters of color comprise 79% of all lower-income, rent-burdened households.
- Black renters comprise 48% of all lower-income, rent-burdened households.
- 60% of senior-headed households are rent-burdened.
- 63% of renters with a disability are rent-burdened.
- 56% of renters with children are rent-burdened.
Do rising rents affect homeowners?
Yes. Rising rents and rising home prices go hand in hand. In the last seven years, home prices have increased 46% (source). While an increase in a home’s value can benefit the owner-occupant when they decide to sell it, a higher assessed value will increase the property taxes the owner must pay while living there. Just as rising rents displace tenants, rising housing prices can cause longtime owner-occupants to choose between foreclosure or selling their property to a higher-income buyer and moving somewhere cheaper. As of 2017, Philadelphia ranked third nationally for foreclosure rate amongst metro areas (source).
Why is gentrification so bad anyway? I want to see positive changes in my neighborhood.
We all want neighborhoods that are safe, beautiful, and have access to resources like grocery stores, transportation, and good public schools. It’s exciting when these resources improve, especially in historically disinvested neighborhoods. But when schools improve and new stores open, a neighborhood’s longest-standing residents don’t always benefit.
When “development” brings new stores and other resources to a neighborhood, new, higher-income residents usually follow. And by increasing the demand for housing in the neighborhood, those new residents usually increase property values. When property values increase, lower-income residents may suddenly be unable to afford their homes, and are forced to move elsewhere. The positive changes in your neighborhood may be positive for you, but may never be felt by lower-income residents who can no longer afford to live in their own neighborhood.
Gentrification can be profoundly impactful for low-income people of color and older adults who don’t have many affordable housing options to begin with. And even without displacement, when a neighborhood’s original residents do manage to stay put they often face exclusion from the newly planned spaces brought by “development” (source).
Rent control is key in allowing long term residents to enjoy the benefits that can come from re-investment in their neighborhoods, rather than pricing them out just as an area becomes desirable. With the change of off the table, residents old and new can experience residential stability and the many proven benefits that come with it –from better educational outcomes to improved physical and mental health (source).
Will rent control hurt “mom and pop” landlords just trying to make ends meet?
Rent control laws allow landlords to receive a “fair return” on their investment with set, yearly rent increases. Landlords who can show they have made capital improvements on a property can also receive approval to increase rent, with the increase spread over time so as not to overburden tenants. This means landlords could still reap more than enough benefit from year-to-year rent increases with rent-control laws in place.
It is also worth noting that the most vocal opponents of rent-control laws are large corporate landlords and investors. These landlords and investors are not trying to make ends meet; they are trying to maximize what are usually already exorbitant profits. Large landlords (25 or more units) control more than half of the city’s rental units (source).
Will rent control cause landlords to sell off their rental properties?
A common concern about rent control is that owners of apartment buildings will convert the units into condos or sell single-family housing to new owners. This has happened in San Francisco. A strong rent control policy will avoid this loophole with policies that discourage conversion of rental units to non-rental units, such as requiring landlords to pay relocation fees of tenants who are forced to move because a unit goes off the rental market. (source)
What about supply and demand?
Armchair economists like to say that rent control is bad because it doesn’t address the reason many believe rent is so costly: the nationwide housing shortage. The logic is that with rent increases capped year to year, there won’t be any incentive to maintain existing housing or build new housing, which will increase prices even more and make the housing shortage worse.
But it’s not as simple as Econ 101 makes it sound; many economists’ arguments against rent control are based on models, not real-world applications. In fact, a study on the Minneapolis housing market showed that new construction could even increase rents on the nearby units that had been the most affordable. In other words, high end or luxury new construction only eases pressure on the high end or luxury rental market. (source)
In the real world, most rent-control policies have features to avoid these hypothetical pitfalls, including incentives that keep housing construction competitive (source). Rent-control laws are also unlikely to cause less new housing to be built, given that studies of New Jersey and the District of Columbia found no significant relationship between the two (source).
What about requiring developers to include affordable units?
We support the construction of housing that is genuinely affordable for working class Philadelphians. However, developers often define “affordable” based on the median income of the Philadelphia metro area, including the wealthiest of its suburbs. They then build “affordable” housing that is unaffordable for most Philadelphians, and profit from tax breaks and other “affordable” development incentives. It is worth remembering, too, the history of racism embedded in our country’s affordable housing policies in the last century.
While recent inclusionary zoning initiatives may help address some of these problems, there is simply no way developers could build enough affordable units fast enough to solve Philadelphia\s housing crisis. Universal rent control will protect every single renter in Philadelphia from the second it goes into effect.
Doesn’t rent control benefit “legacy residents” over newcomers to a city?
Yes. While this is presented as a flaw in anti-rent control arguments, we believe that preventing the displacement of long-term tenants (many of whom are low income and/or people of color in Philadelphia) is a good thing. It’s great that people want to live in Philadelphia, a city that lost well over half a million residents between 1950 and 2000 (source). But the residents who have built their whole lives here deserve the right to stay. In particular, Black residents of neighborhoods that experienced significant disinvestment over the last 50+ years have a right to resist displacement as new capital flows in.
Will rent control alone solve Philly’s housing crisis?
No. But it is a key piece of a larger struggle. When rent control is paired with good cause eviction and right to council laws, tenants are more likely to stay in their homes.
Developers will always try to turn the biggest profit possible -- and in Philadelphia right now that means luxury apartments, not affordable housing. We have to look beyond creating incentives for developers to do the right thing and explore ways to decommodify housing. Expanding and reforming public housing, creating community land trusts, and building social housing are just some ways of doing this that housing justice groups in Philadelphia, including members of our Coalition, are exploring.