Rent Control in Philadelphia: A History

Rent control began in Philadelphia during WWII, as a federal program. In 1942, Congress passed the Emergency Price Control Act (“EPCA”), which created a federal Office of Price Administration (“OPA”) in order to control prices during WWII. This included rent control for areas of military importance, which included most American cities. The rent control scheme under the OPA established a “reference year” for each city, usually 1942 or 1943, and froze rent at those levels. In addition to rent, the legislation froze amenities and furnishings at the same level as the reference year, to keep landlords from increasing profit margins by worsening their apartments. In 1947, Congress extended Federal rent controls, but limited them to buildings that were already rent controlled under the initial EPCA - so buildings built after 1947 Act were exempt. In 1949, Congress passed further legislation removing Federal rent controls and transitioning them to states and municipalities. In 1953, Federal rent controls fully expired in Philadelphia.

In response to the expiration of Federal rental controls, Philadelphia passed a city ordinance establishing rent control. In 1955 the ordinance was challenged, in a case called Warren v. Philadelphia. The city argued that it was facing an emergency housing shortage, and that it thus had the power to enact rent control in order to protect the health and welfare of its citizens. The state supreme court ruled that, in the abstract, the city did indeed have the power to enact rent control in response to such a housing shortage, but did not rule on whether the state of the rental market in 1955 actually justified rent control. The next year, however, in a separate case also titled Warren v. Philadelphia, the state supreme court ruled that the city had not sufficiently proven the existence of a housing shortage acute enough to threaten the health and welfare of Philadelphia residents. Pointing to statistics that showed an increasing vacancy rate and “material” changes in the rental market, the court overturned Philadelphia’s rent control ordinance, and Philadelphia has not had rent control since.