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US rent-control advocates adjust drive in light of construction lags

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Rent control is an "emotionally explosive" subject. It divides major segments of the population -- tenants against landlords, brokers and builders against government agencies and legislators.

The controversy in some areas is building up a storm.

Tenants are joining forces and using their political clout to push for rent control. Real-estate leaders are fighting it, maintaining that it works against the best interests of tenants and the total community in the long run.

"The basic fact about rent control today is that it encourages neglect of existing apartment buildings and discourages construction of new, low-priced apartments," says one housing authority.

Even rent-control proponents now are addressing the problem of reduced construction activity which results from current or even proposed rent-control legislation. New laws and initiatives are being structured to avoid such a hang-up.

San Diego Mayor Pete Wilson describes the problem succinctly:

"Americans face a dismal housing future. Inflation has caused record-high home prices and mortgage-interest rates. The supply of rental housing, the only alternative, shrinks because of rent controls. This creates an unprecedented housing shortage in rent-control areas."

Emphasizing his key point, Mayor Wilson continues: "Rent control has most cruelly and savagely penalized the poor, the very people it was intended to protect, because its inevitable result is the shrinkage of the supply of rental housing."

Responding to this observation, some rent-control advocates are reworking their proposed laws to exclude newly constructed rental units.

In both Los Angeles city and county, for example, proposed rent-control laws would exempt new construction.

A quite unusual rent-control law is proposed in Minneapolis whichwould set up a seven-member rent adjustment board to administer the controls.

The board would set allowable increases annually, based on the landlord's average cost increases. Both tenants and landlords could appeal a board decision.

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