Rent Control In Philadelphia?

[Alex Uman]

What are local investors' thoughts on the adoption of rent control regulations in Philadelphia? I know many rental investors who have moved to the city or choose to invest here from out of state due to such regulation in other cities such as New York. Several City Council members are adamant supporters of such measures. Additionally, Mayor Kenney in the past had expressed that he is open to the idea of expanding tenant protections in the city.

How would you shift your investment strategy in the city if official rent control policies were to be implemented? Do you think such tenant friendly policies would inevitably steer investors away from our city? If you are an out of state investor, would you seek to shift your investments elsewhere?

[Kevin M.]

I think it's interesting that rent control tends to be viewed as one of the most extreme/scary tenant protections in a local rental climate. In my opinion it's low on the list of anti-owner regulations.

As a property manager in Philly- I really don't have much of a problem with limiting rent increases at the end of a Term. Assuming I've placed a good tenant at market rate, I think it's only reasonable to limit your rent increase to inflation (or tax increase). I wouldn't be overly concerned if city council mandated this as long as it contained reasonable carve-outs. I tend to want to keep my tenants and not increase their rents.

There are much larger regulatory issues in my market that tend to just fly under the radar: An eviction process that takes up to a year. A dysfunctional L&I department. Property taxes increasing by 300% in a single year. Trash fees increasing from $300 to $500 in a single year. About 60 pages of required lease disclosures and paperwork that are required to be included in an agreement to utilize eviction courts. Proper Good Cause documentation required to end a month-to-month lease. Lead Safe testing required for every single rental unit in the city built before 1978. $300 violations to a property owner if a neighbor dumps trash on your adjacent sidewalk. 

I would trade any of these for rent control personally/professionally.