Rent Control continues to Collect Opposition, Veto Promise, even as Providence City Council slogs it along

The Providence City Council Thursday formally introduced their rent control ordinance. The ordinance will now go to the Special Committee on Health, Opportunity, Prosperity, and Education (HOPE), where public commentary time will continue.

Members and supporters of the Rhode Island Coalition of Housing Providers showed up in force with about 100 members in response to the introduction. This group of landlords wanted to put a face to the name “housing provider†and let the council know that they are opposed to such an ordinance even with its touted exemptions.

“Every ordinance has had exemptions and has still had the same negative unintended consequences on entire communities. Rent Control is proven to remove existing housing stock from the market and reduce maintenance. It also has extreme impacts on single family homeowner tax bills as displayed in Portland, Maine. It is important that we continue on the path of increasing housing supply and also look into providing further assistance to those who most need it,” read their statement.

About the Rhode Island Coalition of Housing Providers (RICOHP)

The Rhode Island Coalition of Housing Providers (RICOHP) is a landlord-led organization that supports housing providers with education and advocacy. We inform housing providers across Rhode Island of changes or proposed changes to state and federal laws, preserve landlord property rights, and advocate on behalf of landlords in legislative sessions.

RICOHP is committed to serving the Rhode Island community with integrity and respect for all residents that are affected by the current challenges of our housing market. We recognize the diverse demographics of Rhode Island landlords and tenants alike, which allows us to advocate for sensible, smart, sustainable, legislation that will best serve those distinct needs.

Our involvement in the community includes engaging with landlords, tenants, policy makers, and stakeholders, as we work to defend landlord rights, provide education, and foster healthy landlord-tenant relationships. Through responsible business practices motivated by our genuine concern for our community, RICOHP strives to provide leadership in housing solutions that ultimately benefit each Rhode Islander.

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Other voices of dissent

Providence Mayor Smiley

Mayor Smiley has promised to veto the bill presented by the Providence City Council. He said he would be open to discussing measures to control rising rents in the city.

If he were to veto the bill, the Providence City Council could override his decision by at least 10 out of 12 councilors voting to do so.

The RI Public Expenditure Council – RIPEC

The Providence Foundation commissioned the Rhode Island Public Expenditure Council (RIPEC) to examine the potential impacts of rent control policies in Providence, drawing on data and outcomes from cities across the country and evaluating alternative approaches to improve affordability and expand housing options.

Key Findings:

• Rent Control does not lower rents. It offers no immediate relief for those already struggling with high monthly payments and can incentivize landlords to raise rents to the absolute legal maximum every year.
• Rent Control’s benefits are untargeted, tying the largest subsidies to the most expensive housing. In a 3% rent cap scenario, a tenant paying rent of $3,000 per month would realize three times the annual savings ($1,584) of a tenant paying $1,000 per month ($528).
• Price caps swiftly chill housing production. St. Paul, Minnesota saw multifamily permits plummet 86.2% in a single quarter following its 2021 ordinance.
• Revenue caps disincentivize maintenance and encourage condo conversions. San Francisco’s rent-controlled housing supply fell 15% as landlords avoided regulation through conversions, while 64% of controlled units in New York City were found to have maintenance deficiencies.
• Rent control devalues the tax base, triggering a potential tax shift onto homeowners. As rental property values plummet—evidenced by a 5.4% reduction in Portland, Maine’s tax base—cities must either raise property tax rates or cut essential local services to offset the revenue gap.
• Supply-side reforms and rental assistance outperform regulations. Zoning changes in Austin, Texas cut rents by 22 percent, while Boston’s rental assistance program surpassed Seattle’s mandates in preventing displacement.
• Tax stabilization agreements and commercial-to-residential conversions are essential for unlocking housing supply. Boston and Philadelphia successfully use these incentives to make redeveloping underutilized commercial and industrial assets financially viable for developers.

RINewsToday’s January 9th story:

RIPEC Study Finds Rent Control Has Negative Long-Term Impacts on Housing

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RINewsToday’s Real Estate Writer, Emilio DiSpirito

Emilio

DiSpirito said, “Housing affordability is a serious issue. It deserves serious solutions. Rent control has been studied, implemented, repealed, and studied again for decades. The conclusion remains consistent. It does not solve the problem it claims to address.”

He goes on to point out several outcomes of rent control including and makes the point that only more housing will solve the problem of rising rents – noting: “Communities that stabilize housing costs do so by encouraging new construction, streamlining permitting and approvals, allowing density where infrastructure already exists, supporting reinvestment in older housing stock, and providing targeted assistance to those who genuinely need it.

When more homes are built, competition increases. When competition increases, prices stabilize. This relationship holds across markets and economic cycles.”

RINewsToday story with DiSpirito, January 11th:

Rent Control Sounds Appealing. The Data Shows It Fails. – Emilio DiSpirito

NEXT STEPS – Providence City Council

On January 22nd, a majority of the City Council formally introduced what they call the “rent stabilization” ordinance. The ordinance was referred to the Special Committee on Health, Opportunity, Prosperity, and Education (HOPE), where there will be opportunity for public input.

The Council produced this release on the rationale behind the ordinance:

Rent Stabilization 

Providence has the fastest rent growth in the country, even while the national median rent decreased. The median rent in Providence is 40% higher today than it was in 2020. Rising costs have forced working families out of the city and have directly contributed to rising rates of homelessness. Since March 2020, Providence has experienced more than 24,000 evictions. Between 2023 and 2024, Rhode Island experienced a 35% rise in homelessness, the second-highest increase in the country.

Sponsoring councilors developed the ordinance in order to create stability and predictability for Providence renters while supporting a healthy housing market. It allows owners of covered properties to raise rents up to 4% annually, includes exceptions for major tax increases and substantial capital improvements, provides for exemptions for a variety of properties including new construction and small owner-occupied buildings, and establishes a Rent Board to enforce tenant protections, grant exemptions to property owners, and resolve disputes. The ordinance is a balanced, Providence-specific approach—one that stabilizes housing for Providence families while ensuring property owners achieve a fair rate of return.

“Providence renters are cost-burdened—we are the least affordable city for renters in the country. We have to act now to create some stability for Providence families,â€â€¯said Council President Miller. “This ordinance takes immediate action to give residents the breathing room they need. It stabilizes costs, slows a runaway rent pricing problem that will not regulate itself, and prevents our residents from being forced out of our city, all without slowing growth.â€

Notable features of the Providence Rent Stabilization Ordinance include:

• Caps annual rent increases at 4%. A landlord cannot raise the rent by more than 4%, absent a special circumstance, in any 12-month period.
• Sets base rent as the rent charged 180 days before the ordinance takes effect, preventing last-minute price spikes before the law goes into force.
• Establishes a Rent Board to administer and enforce the rules. This five-member board and their staff will review landlord petitions for larger increases, hear tenant complaints, and ensure the ordinance is followed fairly.
• Tenants can report suspected violations and are protected from any landlord retaliation for exercising their rights. The Rent Board can roll back unlawful rent hikes, order landlords to refund overcharged rent, and the City can levy fines for serious violations.
• Exemptions for small, owner-occupied buildings with one to three units, such as duplexes and triple-deckers where the owner lives on-site. A narrow exemption for one additional small property owned by the same individual (not a corporation).
• A 15-year exemption for new construction, including currently existing buildings, to ensure that rent stabilization does not interfere with housing production or financing.
• Built-in flexibility for landlords to address major expenses. Owners can seek approval for a higher rent increase if they make significant capital improvements or have other special circumstances where a larger increase is necessary to ensure they can earn a fair return.
• Automatic flexibility for large property tax increases, allowing landlords to pass on a fair portion of unusually high tax hikes above a 5% threshold using a clear formula.
• Rent can only be increased one time by 4% when a tenant moves out and a new tenant moves in, maintaining stability through vacancies.
• Complaint-based enforcement, allowing tenants to report violations without creating a large new bureaucracy or annual reporting burden on property owners.
• Utility charges must reflect actual costs, ensuring that landlords may only pass through the real price of utilities and not mark them up.
• Properties must be up to code to qualify for annual rent increases, meaning landlords must maintain safe, habitable buildings in order to apply the standard 4% increase.

Since the start of the term in 2023, the City Council has invested $55 million in the City’s Affordable Housing Trust Fund, overhauled the City’s zoning policy to increase density citywide, and incentivized private development through tax stabilization agreements. These policies have brought hundreds of housing units to the City—in both deeply affordable income restricted developments and market rate new construction. The Council has also increased annual budget allocations to the City’s home repair program that provides forgivable no cost loans to residents to maintain their properties and made a one-time $3 million allocation to the program with American Rescue Plan dollars.

Last year, the Council’s Housing Crisis Task Force concluded a two-year investigation into the issues residents—including those at risk of homelessness—face in finding and keeping stable housing with the release of an extensive report, which included rent stabilization among its recommendations.

This is a developing story