Friday, June 26, 2009

Time For A Federal Rent Regulation Law?

Nearly six months after the inauguration of Democratic President Obama, many working-class tenants in the United States still can’t afford to enter many U.S. retail stores and buy many consumer goods anymore because they’re paying over 30 percent of their monthly family incomes to parasitic U.S. landlords. But the Democratic Obama Administration still hasn’t enacted any kind of federal rent regulation law to provide more affordable rents for tenants in all localities within the United States.

Yet by the late 1970s at least 169 other localities in the United States had joined New York City in reintroducing rent regulation laws to protect local tenants from excessive rent increases. And as recently as July 2003, 166 communities in the United States still had rent regulation of some form, despite the continued failure of the Democratic Party to push the U.S. Congress to enact a federal rent regulation law.

In the early part of the 20th century, working-class tenants generally paid landlords between 15 percent and 25 percent of the wages they earned each month. But in the early part of the 21st century, most working-class tenants in the United Sates now pay their landlords over 25 percent of the wages they earn each month; and, in many cities, far more.

Yet even in those communities that have some form of rent regulation, the local real estate industry, landlords, and other special real estate interests are working to limit and weaken tenant protections.

Local real estate boards in coordination with national professional and lobbying associations including the National Association of Realtors, the National Council of the Multi-Housing Industry, and the National Apartment Association, lobby politicians—whose campaigns they bankroll—to bore loopholes into existing regulations. For example, many New York landlords obtained permanent “major capital improvement” rent increases in their rent-stabilized apartments in the 1980s and 1990s just for replacing old windows, thanks to a legal loophole that resulted from lobbyist pressure on the state legislature.

According to a 1997 report, “Rent Deregulation in California and Massachusetts,” by political scientist and urban policy scholar Peter Dreier, California apartment owners and other real estate interests “invested millions in campaign contributions to support anti-rent control legislation,” spending “an estimated $50 million to fight rent control” between 1985 and 1997.

On the national level, the National Association of Realtors contributed over $4 million to fund the electoral campaigns of Democratic and Republican Party candidates for federal office in 2002.

As Dreier puts it:

“It is difficult to exaggerate the political influence of the real estate industry. For years, the various components of the industry—apartment owners, developers, realtors, managers and lenders—worked together to oppose rent control and other tenant protections. This persistence and unity eventually paid off…Industry organizations and their staffs developed close ties to legislators at the state and local levels over the course of several decades.”

(Dollars & Sense magazine 7/03)

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