Citizens' Initiative

There is nothing fair about ‘Fair Rent Portland’

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There is not a group of like-minded thinkers as counterproductive as liberals. With grand ideas like Medicaid expansion (which did nothing to reduce Maine’s uninsured rate, boost the economy or end charity care at Maine hospitals), it’s no surprise that a liberal group in Portland is pushing for rent control; a policy that has long been debunked for its fruitless outcomes.

The group, which calls themselves “Fair Rent Portland,” was established to ensure a local ballot initiative enacting rent stabilization policies finds its way before city voters in November. The housing activists secured enough signatures to move the initiative onto the November ballot, however an obscure error by the City Clerk’s office put the measure in temporary jeopardy.

The Portland City Clerk’s office informed Fair Rent Portland that their measure would not make the ballot because they submitted signatures a few days short of the deadline. However, the law that required signatures be turned in 90 days ahead of the election was not properly enacted, allowing the rent control measure to still appear before Portland voters. The full ordinance can be found here.

Much like other laws liberals advocate for, rent control has the opposite effect of what its proponents intend. Rent control and stabilization are very similar. Rent control places an artificial cap on how much money a landlord can charge its tenant to occupy a unit. Rent stabilization puts an artificial ceiling on how much rent can increase annually. Advocates of these policies believe it will keep prices low and allow low-income individuals to remain in the market, but the effect rent control and stabilization policies have on the market is exactly the opposite.

Restrictions on housing rents disrupt the market, diminish upkeep on rental properties, lead to the abandonment of existing rental units and create a property tax shift from rental-owned to owner-occupied housing. Given the wealth of data on this subject, it is truly not up for serious debate. According to the National Multifamily Housing Council, a survey of economists in the American Economic Association found that 93 percent agreed that “a ceiling on rents reduces the quality and quantity of housing available.”

This is what liberals call “settled science.”

Additionally, these effects, coupled with the unfair language of the ordinance, will put low-income residents in a pinch for housing options and give landlords perverse incentive to no longer maintain their rental units.

Perhaps the most unjust aspect of this ordinance is that it establishes a Rent Board comprised of seven people. Five members of the board must come from the five different city wards in Portland, and there are two at-large members. The board must contain at least four tenants and one landlord, meaning that tenants will, by design, have significantly more influence on the board.

Portland Mayor Ethan Strimling displayed his lack of understanding regarding the ballot language on WGAN radio Tuesday morning.

“There’s misinformation out there already,” Strimling said. “[Regarding] The tenant-landlord board, I keep hearing different things. The business community thinks that there is only one landlord on it, I think there’s more than that.”

Strimling is not telling the truth. Article XII Sec. 6-250 of the proposed ordinance reads:

“The city shall take reasonable steps, but is not required, to appoint to the Rent Board at least one (1) Landlord and at least four (4) tenants.”

In other words, the city should try to ensure that at least one landlord is on the board, however it is not a requirement. Based on this language, the board could be composed entirely of tenants, so long as the city of Portland can prove it took “reasonable steps” to ensure representation of at least one landlord.

This board determines what percent rents may rise on an annual basis. The language of the referendum prevents rent from increasing more than 10 percent on any covered unit in a given year, however rent can increase based on the percentages established by the Rent Board.

Using only the minimum requirements defined in the ballot language, it’s hard to see how rent would rise at all in Portland. What’s more clear is how devastating this would be to the city.

About Jacob Posik

Jacob Posik, of Turner, is a policy analyst for the Maine Heritage Policy Center. He can be reached at jposik@mainepolicy.org.

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