Rent Control:

In a capitalist housing situation, rent control is always an emergency measure. It is usually introduced in time of war, when the government wants to discourage housing investment so that capital will flow into war-related industry.

But, used in war or peace, rent control is also a means of trying to assure some sort of "fair profit" to real estate interests, as well as "social peace" for the political system itself. When the shortage of decent housing gets to a certain point, rent increases and evictions cause tenants to form tenant unions and fight evictions by force. The rent control process channels this struggle into hearings where the tenants' numbers become less important, and where the landlords' access to legal and economic expertise becomes more important.

Rent control doesn't strike at the roots of the "housing crisis" in America today. One root is the cost of adequate housing, which has to support the regressive property tax, mortgage payments, and inflated land costs. The other root is inadequate income levels in the poor and working class. The housing problem can never be solved all by itself. In the final analysis it depends on the distribution of wealth in society.

Why, then, do tenants and their organizations fight for rent control? Why do landlords fight against it? The actual demands of the tenants are for decent housing at rents we can afford to pay, and security against the landlords' power to evict. The actual demands of landlords are for cheap housing at whatever rents the market will bear, and complete control over who lives in their properties and who doesn't.

The Cambridge Tenants Organizing Committee (CTOC) fights for rent control because it represents a concession that the government has given us in response to our organizing efforts. It gives tenants certain tools they can use to build more organizations. The eviction process is made longer and more difficult for landlords, and rent increases take longer and may be prevented if the right pressures are applied to the rent control authority.

Despite the sabotage that rent control has been subject to in its four years in Cambridge, there are far fewer evictions now than there used to be, there are tenants unions, and speculators are discouraged.

Under rent control, rents are initially rolled back to what they were six months before the local law was adopted. But, chances are even the rollback rent is more than most tenants can afford. And it's unlikely rents will stay frozen at this rollback level very long.

Since the law guarantees landlords a "fair net operating income," any owner earning no more than an amount defined as "fair" will probably be allowed to raise rents as the costs of operating his apartments increase. For instance, he would be allowed to raise rents for increases in property taxes, which in many cities have risen as much as 20 per cent a year recently. The rent control office might even allow landlords to raise their profits each year, passing this cost on to tenants too.

But under a strong rent control system, rents can be considerably lower than they would have been without control. For instance, the rent control office could make the landlord pay for some or all of his increased operating expenses, including taxes. A strict definition of "fair net operating income" could force many landlords to reduce their rents. Rent decreases could also be ordered if housing is substandard, or if the landlord is making more than a "fair net operating income."

Housing is one of the few commodities whose price or market value increases as it deteriorates and gets older. This is because the value of a piece of property reflects the amount of income it can produce for its owner, and not its true value as a place for tenants to live.

When there is strong demand for housing, profits and rents go up rapidly. This makes property values go up, too. And when a building is sold at a higher value, the rent goes up again--to pay for higher mortgage and property tax costs, which are based on the property value. This vicious cycle is a major symptom of the housing crisis today.

Under rent control, the value of a building will still be based on its profitability to the owner, not on its true worth to tenants. But since profits and rent increases are limited, values should go up less rapidly or stabilize. With a strong pro-tenant rent control system, inflated property values could even be reduced.

One reason why so much housing is in poor shape today is that most of the money tenants pay for rent isn't spent on maintaining and improving the apartment. Instead, it goes to pay principal and interest on the landlord's mortgage, the landlord's property tax bill, etc. In fact, about 65 cents of every rent dollar you pay is spent on things that have nothing to do with keeping your apartment in good condition (mostly mortgage and taxes).

This problem still exists under rent control. But at least tenants need not be forced to pay outrageous rents for substandard conditions. Substantial rent reductions for substandard housing could force some landlords to make repairs rather than lose their buildings. Rent control can also improve conditions by making it easier for tenants to use the new state "right to repair law," which allows tenants to spend rent money on repairs. And by squeezing out speculators who demand higher profits than the law allows, rent control can remove a significant blighting influence from the community.

Rent control doesn't change the most important facts about the landlord-tenant situation. The landlord still has basic control over who lives in his buildings and when they have to move. This is because the rent control law gives landlords at least nine "just causes" for eviction--including non-payment of rent, demolition of the building, etc. But under a strong rent control system, tenants can restrict the meaning of these "just causes" to allow few grounds for eviction.

Most important, rent control provides an opportunity to build strong tenant organizations at the building, neighborhood, and city-wide levels. This is the only way that a pro-tenant rent control system can be won and enforced. A tenants' movement organized around rent control can begin to work for a better "people's rent control" system, and for basic changes in the way housing is provided and controlled.

Landlords frequently argue that rent control leads to substandard housing. If rent control were only repealed, they say, landlords would have more money to invest in their buildings, and housing conditions would obviously improve.

A recent report by New York State's Temporary State Commission on Living Costs and the Economy shows just how fallacious this idea is. Under a state "vacancy decontrol" law enacted in 1971, rent controlled apartments in New York City are automatically "decontrolled" as soon as the tenant moves out. This law has resulted in sky-rocketing rents in decontrolled apartments. But according to the commission's report, vacancy decontrol has "failed to spur" landlords to make major improvements in their buildings. In fact, the level of major improvements has fallen off significantly since vacancy decontrol began.

The commission looked at alteration permits granted by the city Building Department for major building improvements. In 1969, 1809 such permits were issued, and in 1970 the total was 1432. But in 1972, the first full year of vacancy decontrol, only 872 alteration permits were issued. In 1973, there were 903 permits.

What the New York report shows is that rent decontrol means extra profits for landlords, not extra money for building improvements. The same thing would be true in Massachusetts if rent control were repealed here.

CTOC offices are at 595 Mass. Ave.