Nish Kohli, Providence Journal | USA TODAY NETWORK
The Providence City Council unveiled its proposal to place a 4% cap on annual rent increases for most rental homes – a simple measure that members say would help stabilize housing prices while ensuring fair returns for landlords.
Grassroots organizers have spent years vying for rent stabilization in Providence and have finally gained ground with the council’s progressive membership, which believes rent stabilization is a key component of addressing unaffordability in the housing market.
‘Year after year, Providence has topped housing lists for all the wrong reasons,’ City Council President Rachel Miller said at the announcement event on Jan. 20, as dozens of residents in support stood around her. ‘Rent in Providence has increased 40% since 2020. Have our incomes increased by 40% in the last five years?’
The average income gain was closer to 15%, she noted.
The proposal excludes owner-occupied buildings of three units or fewer, as well as newly constructed homes for a period of 15 years, in an effort to support mom-and-pop landlords and encourage new housing construction. Other exceptions to the 4% limit would include properties hit with major tax increases, or that undergo costly building upgrades.
The ordinance will be officially introduced at the next council meeting on Jan. 22 and referred to committee. Miller explained that councilors plan to solicit input at public hearings in the coming weeks and will amend the ordinance accordingly before taking it to the floor for an adoption vote later on.
Why proponents want to enact rent stabilization
The ordinance’s sponsors wrote that they chose a 4% cap because it’s easy to predict, modest enough for tenants to plan for and accounts for the regular inflationary costs of a healthy housing market.
‘I think what a lot of people get wrong is that they see rent stabilization as some kind of extreme proposal. It’s really not. When you think about it, our government at all levels has a lot of basic protections for citizens,’ said Siraj Sindhu, executive director of Reclaim RI, a housing justice coalition. ‘It just puts a little guardrail on how much rents can increase by.’
In addition to supporting tenant unions and advocating for tenants’ rights at the state level, Reclaim has thrown its full weight behind the rent stabilization ordinance. Sindhu said he’s heard a lot of enthusiasm for the proposal, and it appeals to working-class families who tell him they get hit with hundreds of dollars in rent increases each year, which can add up to thousands.
‘I’d love to live in Providence,’ said James Field, a tenant organizer with Reclaim who got involved with the group after they helped open a court case against his West Warwick landlord for lead exposure and other hazards. ‘I’d love to live in the city. I really like that life, but it’s not affordable.’
Alex Karoff-Hunger and his wife have lived in the city for most of their lives and own a two-unit historic property on the South Side. The couple live in one unit and rent the other out. Owner-occupied properties of that size are excluded under the rent stabilization ordinance, but because their house was rehabilitated through the Providence Revolving Fund, there’s already a clause in the mortgage that limits annual rent increases in the neighboring rental unit.
‘I don’t think anybody becomes an owner-occupied landlord to become a millionaire. For us, it was the issue of making sure the community we live in is going to look like the community we live in 20, 40 or 60 years down the line,’ he said. ‘People aren’t going to jack up rent on people they care about.’
Last year’s major property tax hikes were difficult for Karoff-Hunger and other small landlords, but he still supports rent stabilization, because he believes that pressing issues in the housing market are manufactured by bad actors.
‘As a former Realtor and as a homeowner myself, I know that local homeownership is the key to generational wealth,’ said City Council President Pro Tempore Juan Pichardo, who cosponsored the ordinance. ‘We are targeting the large-scale corporate entities – let’s be clear – that treat our blocks like stock portfolios.’
Backlash against capping rent increases
Throughout the United States, more than 30 states prohibit rent control and preempt cities from enacting it, but Rhode Island isn’t one of them. Despite the stigma, numerous cities, particularly in Democrat-led areas, have moved forward with the idea in recent years.
The Providence Foundation – a group with business interests that promotes investment in downtown Providence – condemned rent control earlier in January following the release of a 26-page report commissioned by the group and written by the Rhode Island Public Expenditure Council (a public policy research nonprofit that also features prominent Providence businesses among its donors).
The report analyzed data from other studies on rental regulation throughout the United States, concluding that rent control ultimately harms the housing market, undermines affordability and reduces new construction. It pointed to the 3% cap on rent increases enacted in St. Paul, Minnesota, in 2021. Since new construction wasn’t excluded, the ordinance ’caused an immediate collapse in the production of new housing,’ wrote RIPEC, noting significant losses in property value.
‘While well-intentioned, rent control is historically proven to have detrimental impacts on those it intends to serve, as well as wide-sweeping unintended consequences on the community at large – despite any exemptions or claims of a unique approach,’ Shannon Weinstein said on behalf of the Rhode Island Coalition of Housing Providers after the ordinance was announced.
Providence’s proposed ordinance takes into account those lessons learned by other cities and towns, its backers argued.
‘Where we’ve seen approaches be very successful, we added them into our ordinance. Where we’ve seen unintended consequences, we’ve left those pieces behind,’ explained the council’s frequently asked questions about rent stabilization page.
Miller stressed that rent stabilization is part of a three-pronged approach for the city’s housing strategy, joined by measures to increase the overall supply of housing and to protect the existing housing stock. Builders have to show investors that they’ll recoup construction costs, so giving a 15-year grace period before rent stabilization goes into effect will keep Providence on track to build more of the new housing that it needs, she noted.
‘I will always work with people who are coming to us in good faith to make our laws the best they can be,’ she said. ‘But there are big, wealthy private interests who will fight Providence’s rent stabilization, tooth and nail. Look out for them. They are the ones who are keeping Providence families on the brink of destruction. They are the ones profiting from a runaway market.’
How the ordinance envisions rent stabilization
Along with the 4% cap, the ordinance would create a five-member ‘Rent Board’ to review landlord petitions for higher rent increases and to hear tenant complaints about unlawful rent hikes, retaliatory actions or a landlord’s failure to provide required services and utilities.
The board would be able to impose fines of $100 to $500 per violation each day, and doesn’t plan to catalog or monitor rental homes. Instead, the City Council would back tenant education regarding renters’ rights and complaint-based enforcement.
Properties would have to be safe and up to code to qualify for any annual rent increases. The base rent would be whatever the rate is 180 days before the ordinance goes into effect, preventing last-minute price spikes.
Board members would serve five-year terms, with four members appointed by the City Council president and one by the mayor. All members would have to be city residents and have a diversity of viewpoints and experience, such as tenant advocacy, housing development, property ownership, housing policy and construction.
Along with Miller and Pichardo, the ordinance’s City Council cosponsors are Mary Kay Harris, Miguel Sanchez, Sue AnderBois, Jill Davidson, Althea Graves and Justin Roias.
Reclaim has been coordinating door-to-door canvassing sessions in wards with councilors who have not voiced support for the ordinance, asking people to call or send messages in favor of rent stabilization. The group collaborates with other local organizations in favor of the measure, including Direct Action for Rights and Equality, SISTA Fire, the Olneyville Neighborhood Association, the Rhode Island Center for Justice, and the Rhode Island State Council of Churches.
Mayor Brett Smiley is outspoken about his distaste for rent control and shared his skepticism of the proposal at a separate event the day it was announced.
‘I haven’t yet talked to the mayor about this particular proposal,’ said Miller. ‘I’m looking forward to that conversation, and I’m forever optimistic and open to a positive discussion.’
If the ordinances passes among city councilors and the mayor uses his veto power to strike it down, the Council would need at least 10 of its 15 members to override the veto. State Rep. David Morales, who’s challenging Smiley for the mayoral seat this November, was in attendance at the rent stabilization announcement – on brand for his campaign centering affordability.
‘It was disappointing that there were some councilors who were reluctant to openly voice their support for this ordinance, in spite of the fact that Providence is a renter-city. There are lots of renters here and their constituents may largely be renters,’ said Marcus Mitchell, DARE’s executive director, but who understood that some may have wanted to wait until the final draft was released. ‘I’m looking for their support now and hoping that it will come.’
Submitted by RIMBA’s Lobbyist
Lenette C. Forry-Menard, Esq.
Champion Advocacy Associates
10 Lincoln Drive
North Smithfield, RI 02896
Phone 401-374-0456
Fax 401-597-6726