Reagan leadership may have role in settling rent control disputes
Landlords and tenants across the country are preparing for new rounds of fighting over rent controls, as the Reagan administration prepares to climb into the ring -- not as a referee but as a participant.
This doesnt mean, however, that there hasn't already been or will be a lot of room for compromise in the controversial arena of rent control. spokesman for landlord and tenant groups and government officials who administer rent control agree that the major stumbling block to an equitable solution is the tendency for all sides concerned to employ extremes in defense of their positions.
In New York's south Bronx, for example, some landlords have blamed the deterioration of the area solely on rent control; others say the controls are only part of the problem. to highlight the ridiculous nature of the controls, they point out that there are still some "apartments" in New Yorks's ultra-posh Plaza Hotel under rent controls imposed during World War II. Tenants groups, meanwhile, counter that many poor and elderly people would not longer be able to afford to stay in their apartments should rent controls be lifted.
New York city Mayor Edward I. Koch, adding fuel to the fires of extremism, said in an interview with the Monitor that if controls were lifted in New York the rents on nearly a million "rent stabilized" apartments "would double."
But a deeper look at some rent-control programs around the country shows that many efforts are being made to find compromises:
* Boston. This city has approximately 45,000 to 50,000 rent-controlled apartment units, down from about 110,000 four years ago. Here the "compromise" between landlords and tenants has taken the form of a 1976 amendment to the city's original rent-control law, which took effect three years earlier. This amendment, called "vacancy decontrol," removes an apartment unit from rent controls when that apartment becomes vacant.
Although this relaxation has made some landlords a little happier, "it still is too early to tell," if vacancy decontrol will prod a great many more landlords to fix up their buildings -- one of its chief aims, says, Bernard Shadrawy Jr., who heads this city's rent-con- trol office. "So far, there hasn't been an appreciable increase, not that some haven't fixed up their buildings," he says.
* Washington, D.C. The District of Columbia has roughly 112,000 rent-controlled apartments, out of which some 5,000 are in such bad shape they have been abandoned by their owners. In turn, as in New York, Los Angeles, and other cities, many landlords lay the blame on controls. But just last month, under pressure from owner groups, the City council here passed and ordinance permitting landlords of units that become vacant to raise rents 10 percent. And Dorothy Kennison, the District of Columbia's rent administrator, says "many landlords are happy with our rent-control law, because if they don't get their allotable increase, they can claim that the increase is backed up by the District." Washington landlords can get an 8 percent increase a year on the assessed value of their property, and much more "in hardship cases," Mrs. Kennison says.
* Thousand Oaks, Calif. This affluent community -- about an hour's drive from downtown Los Angeles -- adopted rent control for all apartment houses of five units or more about six months ago. The reason: like leaders in dozens of other communities around the country, city officials felt rent increases were exhorbitant -- capitalizing on an increased population and a housing shortage. And on election day last month voters rejected a bid to lift the controls. But James Lontin, city attorney for Thousand Oaks, says he believes the existing three-year ordinance won't need to be extended because it addresses only a short-term housing problem. In the meantime, he adds, the ordiances give landlords an automatic 8 percent a year increase -- and more, if landlords persuade authorities there is a genuine need.
* New York City. The Big Apple has more rent-controlled units than any other city. Half of the city's 2.5 million apartment units are controlled, but 340, 000 of these are under rent controls imposed during World War II. The remainder of the controlled units are under the city's rent-stabilization law, passed in 1969, and their rents go up a certain percentage every year, depending on energy costs and other landlord expenses.
Harry Helmsley, a landlord with considerable real estate holdings in the city , says that New York's so-called problem, too, and has brought apartment construction to a virtual halt. His main opposition to this form of control is that it doesn't permit landlords to earn a fair return on their investment. "It makes no sense in this city to build rental units," he
In the future, it appears, landlords like Helmsley will be looking to a Reagan White House for help in striking a compromise over rent-control regulations. "I think it [elimination of rent control] could happen on a nationwide basis and that probably a compromise could be worked out on some phasing in over a period of years," he says.
The President-elect's urban-policy task force recently recommended the elimination of rent control with a provision, such as cash vouchers, to help the poor and the elderly unable to absorb rent increased that the ending of controls would bring.
This call for government subsidies, in vouchers or whatever form it takes, appeals to landlords. The National Multi Housing Council, a lobbying group representing antirent-control advocates on Capitol Hill, has endorsed government subsidies for poor people but hasnht decided if a voucher system is the best way to do it.
For his part, President-elect Reagan has not decided which way to go on rent controls. It was not a campaign issue. But, clearly, in the atmosphere of deregulation that may dominate Washington under the Reagan administration, movement away from rent controls through federal action is a possibility.
A Reagan administration "creates a climate whereby the elimination of rent controls becomes possible where it wasn't under the Carter administration," said a spokesman for the Multi Housing Council. Proponents of federal action against rent control say the easiest step for Congress would be to withhold federal housing subsidies from communities which regulate rent. A proposal of this type was initially approved by Congress this summer. However, the bill, which would have denied housing subsidy money to communities with rent controls on newly built units,was attached to a larger measure which failed.
While Mayor Kock and rent-control advocates promise to be in the forefront of steps to try again for a compromise, the tide seems to be turning against them.