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A new bill introduced recently in the North Carolina state legislature could give local officials statewide the power to curb rising rents.
In Wilmington, rent hikes have become the norm for many since the start of the COVID-19 pandemic. Before the pandemic hit, average monthly rent in Wilmington hovered around $1,250. Now, it averages around $1,800, according to data from Rent.com. But it has shown signs of stabilizing.
Rents in North Carolina’s biggest cities have also climbed. While campaigning for the North Carolina Senate last year, Lisa Grafstein said rent was a hot topic with her Raleigh-area constituents. It was hard to have a conversation that didn’t mention affordability, she said.
Prompted by those rising rents, Grafstein, a Democrat who represents District 13, filed a bill that would strike a state statute that prohibits city and county governments from regulating rents.
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Why is rent control banned?
In 1987, the North Carolina legislature approved the existing rent control ban by a wide margin with bipartisan support.
The statute states no city or county “may enact, maintain or enforce any ordinance or resolution which regulates the amount of rent to be charged for privately owned, single family or multiple unit residential or commercial rental property.”
Since then, just a handful of bills aimed at workforce housing and inclusionary zoning have been introduced in the state legislature, Grafstein said.
What would this bill do?
Grafstein’s bill would strike the ban on local rent control from state law.
That would allow leaders across the state to address affordability issues in ways tailored to the area, Grafstein said.
“To me, the important thing was to untie the hands of local governments so they could look at their specific circumstances,” she said, “and see what was in the best interest of their local residents and try to do something to help them.”
Those efforts could take a variety of forms, ranging from rent control, to subsidies or concessions to builders. “The virtue of this particular bill is it’s not requiring any local government to do anything,” Grafstein said. “It’s just taking away a barrier that’s in place at the state level.”
A nationwide trend
As rents rose during the pandemic, Jim Lapides, a vice president of advocacy and strategic communications with the National Multifamily Housing Council, said he noticed an uptick in legislation aimed at giving rent control powers to local leaders.
“There is this huge housing affordability crisis, and cities and states don’t have a ton of levers that they can pull to try to impact this issue,” Lapides said. “So, rent control seems like something that is a quick fix.”
Currently, the District of Columbia, Oregon and California have statewide rent control ordinances. Several other states, including New York, Maine, Maryland and New Jersey, have local and county rent control ordinances in effect, according to data from the National Multifamily Housing Council.
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Is rent control effective?
Rent control can help reduce rents quickly, but research has shown there can be a down side.
Government-sponsored rent control can drive up rents for other renters, result in reduced housing supply and, if not targeted, can disproportionately benefit high-income renters, Lapides said.
“It’s really the worst possible thing that you can do to address housing,” he said.
In place of rent control alone, Lapides said the National Multifamily Housing Council advocates for subsidies to lower income renters to address short-term cost hikes and in the long term is pushing for more construction to address an imbalance of housing supply and demand.
What’s the future of the N.C. bill?
The bill has been referred to the state senate’s rules committee and needs a push from the committee’s chair to make it to the floor. That’s unlikely given the Republican-dominated house and senate.
“It’s not a place where I think there’s an overwhelming appetite for a bill like this,” Grafstein said.
Still, she said, it’s a start to addressing the rising cost of housing, an issue Grafstein and others in the state legislature are looking to address this session.
“There’s an understanding that we need to do something,” she said. “How much gets done is a big question.”
Reporter Emma Dill can be reached at edill@gannett.com.
