Rent increases to keep pace with inflation are not considered “rent gouging” by most people, even if the rent increase is more than 3%. Rent control in Washington, D.C., for example, has allowed landlords to increase rent at rates as high as 8.9% or 62%.

A recently introduced bill by Virginia’s legislator, Senate Bill 1136 would allow local governments adopt “anti rent gouging” laws. The ordinances would make it illegal to raise rents by more than 3 percent. However, a rent increase of 1%, 2%, or even less could be considered rent gouging.

Virginia does not allow local governments to impose rent regulation or control. Virginia’s Dillon Rule mandates that local governments adopt a Rent-Control Ordinance only after they have obtained an enabling law.

SB 1136 would limit rent increases to 3%, which is the rate of inflation in 2021. This effectively reduces rent by at least 4.5% after inflation. HB 2175 is another bill that is pending before the Virginia legislature. It would allow local “rent-gouging” ordinances. However, instead of capping increases at 3%, it would cap rents at inflation or 7% “whichever is lower,” or even by a smaller percentage selected by local governments as their “anti rent gouging allowance”.

Rents are declining due to inflation, which seems unfair. Why can’t landlords charge rents that are in line with inflation when their costs (such as land and property taxes) tend to increase with inflation and tenants’ wages also keep up with inflation? has risen faster than the inflation rate since 2014. went from $25.48 per hour in July of 2014 to $35.61 by November 2024. This is a 45% increase compared to ‘s inflation rate of 33%. Virginia’s minimum wage rose from $7.25 to $12.41 in 2014. This is an increase of 71%. Renters who are retired may be able to pay more due to inflation because they receive annual increases in social security payments that are based on cost of living adjustments.

SB 1136 allows local governments to impose a very strict rent control. Virginia currently has no rent control laws at either the local or state government levels. It is one out of 33 states where prohibit local government from adopting rent controls. This is often because they believe that rent control creates housing shortages and is economically detrimental.

Around 93% economists believe that rent control is bad because it reduces housing quality and quantity — as was the case in a 1992 survey of members of the American Economic Association .

In 2023, The Wall Street Journal stated that “Rent control is counterproductive to its goal.” Rent control can lead to housing shortages because it discourages new construction and maintenance.

The liberal Washington Post also said that “Rent control laws can benefit some people, but not those who need it most.” Rent control laws are not good for everyone.

Rent control can also lead to a reduction in the quality of housing. Rent control, as the Brookings Institution points out “can also lead to decay in the rental housing stock. Landlords may not make investments because they cannot recoup their investment by increasing rents.”

Rent increases are not enough to cover repairs and renovations. Landlords may allow apartment buildings to decay. In New York, restricted rent increases for major capital improvements. After this limit was reached, landlords reduced such improvements. In a survey of rent stabilized landlords , it was found that, when rent increases were curbed by the law, three of four landlords reported cutting back essential building-wide repair, such as roof replacement or boiler replacement. Nearly 90% said that they had opted out of kitchen and bathroom renovations. Over half of respondents decided not to upgrade their security systems with cameras, video intercoms, or storage lockers to deter porch pirates. The priority of efficiency upgrades has also been put on hold. Over 40% of respondents stated that they would not upgrade to LED lighting fixtures, which use 90% less energy. This is a cost-saving measure for tenants.

The Washington Post points out that “landlords are less motivated to maintain their property in a rent controlled environment”, resulting in poorer housing quality.

Rent control is a bad idea for local governments, as it can lower the value of the housing stock and reduce property tax revenues that fund schools and local government. “Researchers from the University of Southern California found that rent control in St. Paul, Minn. hurt property values by $1.6 billion,” stated MarketWatch.

FairfaxGOP originally wrote this and published it as Rent Control Coming to Virginia, Property Owners Lookout