The Problem
In 2023, Providence had the largest year over year residential rent increase compared to every other major U.S. city. [1] Rising rental rates are not isolated to the Ocean State. Median residential rent prices increased in cities and towns across the Northeast last year.[2] This fact has some activists, as well as several state and local legislators, considering rent control legislation as a means to alleviate the growing financial burden on local renters. Support for such action in Providence has grown and a rent control ordinance may soon be brought to a vote with the Providence City Council (“City Council”).[3]
Historically, “rent control” has included regulations that place firm caps on maximum rents, as well as limits on rent increases.[4] Most local regulations today are considered “rent stabilization” measures which target specific property types within a city and permit periodic rent increases.[5] Rhode Island had rent control in the early 20th century, but any comparable regulations have since failed to be reintroduced.[6] Other states, however, like New York, California and Oregon have passed legislation that permits their respective municipalities to enact their own rent control regulations.[7] There is much debate as to whether rent control is the right response to rent increases. Research on the topic yields mixed results, as there is evidence that supports positive impacts on renters but also negative effects for landlords and developers.[8]
The Legal Challenge
So, what legal challenges should Providence consider while enacting its own rent control or stabilization ordinance? Article 13, Section 2 of the Rhode Island Constitution provides municipalities with “local legislative powers”. This “Home Rule Amendment” extends authority to each city or town with, “…the power at any time to…enact and amend local laws relating to its property, affairs and government not inconsistent with [the Rhode Island] Constitution and laws enacted by the general assembly in conformity with the powers reserved to the general assembly.” Rent control advocates argue that the Home Rule doctrine enables Providence to pass a rent control ordinance. This may be true, so long as it does not conflict with existing state law.
On the other hand, the City Council likely would be prevented from enacting such an ordinance if the state either specifically reserves such a power solely to the state, or a body of law preempts (or blocks) the ordinance by “occupying the field” of that particular area of regulation.[9] Currently, there are no specific state statutes prohibiting, limiting or permitting rent control. However, the state’s Residential Landlord and Tenant Act, in addition to the body of law governing contracts and property rights, is quite comprehensive with respect to residential occupancies, and thereby may sufficiently “occupy the field” related to rent control regulations.[10] If the state has occupied this field sufficiently to preempt local action without state authority, then the rent control ordinance would be unlawful and unenforceable.
Since one could argue there is no clear answer to this question absent rent control legislation, if the City Council passes a rent control ordinance without such legislation, the ordinance’s legality likely would be challenged and the answer would then come from the Rhode Island courts.
Proposed Legislation
Three separate rent control bills have been introduced in the current session of the Rhode Island General Assembly. Senate Bill S2417 would set a limitation on rent increases to four percent (4%) per year unless the landlord can articulate necessity for a greater increase. House Bill H7989 would authorize cities and towns to establish a housing authority to adopt tenant protection measures, including rent control, annual rent increase ordinances and no-fault evictions, subject to certain exemptions. House Bill H7891 would authorize the city of Providence to adopt rent control ordinances subject to certain exemptions. Each of these proposed bills has been referred to the appropriate committee for consideration.
Additionally, the local group Direct Action for Rights and Equality, has drafted a rent stabilization ordinance for the City Council’s consideration which would limit rental increases to once per year at four percent (4%).[11] The City Council has not yet acted on the proposal.
While the outcome of these proposals is unknown, readers are encouraged to follow them closely as they will likely influence the housing market in Providence and beyond.
[1] Nicole Bachaud, A Blend of Stability and Gradual Changes in the U.S. Rental Market (November 2023 Rental Market Report), (Mar. 19, 2024), https://www.zillow.com/research/november-2023-rent-report-33470/.
[2] Id.
[3] A rent control ordinance has been drafted by the local activist group, Direct Action for Rights and Equality. A copy of the drafted ordnance can be found here: https://docs.google.com/document/d/1qHuLuOp-qUqLz70839blNoNyMSFMhrz3/edit. The City Council has yet to set a hearing for this or any other rent control or rent stabilization ordinance. See also Footnote 11.
[4] Brenda Richardson, The Pros and Cons of Rent Control For Landlords and Tenants, (Mar. 23, 2023), https://www.forbes.com/sites/brendarichardson/2023/03/23/national-apartment-association-study-finds-that-rent-control-is-not-the-solution-it-appears-to-be/?sh=6631910259f0.
[5] Prasanna Rajasekaran, Mark Treskon, and Solomon Greene, Rent Control:
What Does the Research Tell Us about the Effectiveness of Local Action?, (Apr. 1, 2024), https://www.urban.org/sites/default/files/publication/99646/rent_control._what_does_the_research_tell_us_about_the_effectiveness_of_local_action_1.pdf.
[6] Antonia Noori Farzan, Rhode Island used to have rent control. What would it take to bring it back? THE PROVIDENCE JOURNAL, (Jan. 22, 2024), https://www.providencejournal.com/story/news/politics/2024/01/22/push-for-rent-control-gains-momentum-in-providence-and-rest-of-rhode-island-2024/71804148007/.
[7] ORS 90.323; Cal. Civ. Code § 1947.12; NYC Admin. Code §§26-405(a)(5), 26-407.1.
[8] Prasanna Rajasekaran, Mark Treskon, and Solomon Greene, Rent Control:
What Does the Research Tell Us about the Effectiveness of Local Action?, (Apr. 1, 2024), https://www.urban.org/sites/default/files/publication/99646/rent_control._what_does_the_research_tell_us_about_the_effectiveness_of_local_action_1.pdf.
[9] Amico’s Inc. v. Mattos, 789 A.2d 899, 907 (R.I. 2002).
[10] R.I.G.L. § 34–18-1 et seq.
[11] THA Launches Rent Stabilization for Providence, (Apr. 1, 2024), https://daretowin.org/tha-launches-rent-stabilization-for-providence/.
