Upstate Rent Control Regulations
The Greater Binghamton Chamber of Commerce, has come out against legislation to allow Upstate local governments to opt into the Emergency Tenant Protection Act (S.5040) / (A.7046).
While the intentions of rent control or rent stabilization are good, the consequences that result from such a policy are destructive and end up creating a worse situation for both landlords and tenants.
A scarcity in housing creates unaffordable housing for renters. Rent control, rather than encouraging investment, reduces investment into affordable housing and therefore creates more scarcity. Rent control greatly diminishes the motivation for landlords to maintain and improve their property. Due to the set levels of rent increases, they are unable to provide upkeep to the buildings which lead to a worsening housing stock. This will ultimately shrink the tax base.
The Greater Binghamton area already is suffering from an aging housing stock and people are not motivated to invest in our region due to some of the highest effective property taxes as compared to home values in the nation.
If rent control is made possible for localities to opt into, this will have a chilling effect on the investment into our housing stock. Many people willing to invest in our community will have to think twice knowing that our local governments could face enough pressure to enact rent controls and in turn devalue their investment. Additionally, the local opt in approach proposed in this legislation will create a patchwork of regulations across Upstate making it more difficult for landlords to invest.
Government imposed price controls always leads to a price distortion that does not match market value. By forcing a sub-market value on landlords, rent control incentivizes bad behavior and makes landlords less likely to invest in their properties and needs of their tenants.
We need to be encouraging people to invest in affordable housing, but unfortunately rent control makes people invest elsewhere. Investment in a community’s housing stock is a natural
rent control, because landlords must keep rent competitive and tenants are able to shop around for the property that would best suit their needs.
In Upstate, only Albany and Rochester are scheduled to have hearings on the proposed legislation. It would have been in the best interest of our residents to have a hearing in the Southern Tier as well.