If there are any multifamily operators considering projects in Portland, Maine, they'd best hold on to see what happens with this: There's a push for rent control promulgated by groups that want to use the state's antiquated and simplistic citizen ballot initiative to force a public vote on the issue.
There is push-back, however. "Say No to Rent Control" announced Aug. 15 its formal opposition to the proposed ballot referendum to implement rent control in the city of Portland.
"Simply put, this proposed rent-control referendum is reckless and extreme," notes Brit Vitalius, a spokesperson for the group. "It would cause immediate and lasting problems for the entire city, ultimately resulting in less-safe housing, and a decline in neighborhoods, while shifting the property-tax burden toward individual homeowners."
The referendum would require property owners wishing to raise rent to go before a proposed "rent-control board" of seven volunteers, of whom four are tenants. Tenants could also appeal rental increases and lease terminations to this board, which would be given authority to impose fines through the proposed ordinance. The board would replace the court system and the free-market system, adding bureaucracy for both tenants and property owners.
Additionally, there are many inherent legal issues that would make this proposal difficult, if not impossible, to enforce. "Many provisions of this proposed ordinance are preempted by state law and therefore unenforceable by the city," says Vitalius. "This ill-conceived 'rent-control board' would be a legal and bureaucratic nightmare for Portland."
The referendum, which would lock in rents as of Nov. 1, 2017, would force the rent amount to remain with the property rather than have it reset when a tenant leaves. Property values could stagnate as rents became essentially fixed. Further exacerbating the situation, with rents controlled by the city, property owners would have little incentive to invest in or even maintain their properties.
