Three years since rent control was implemented in Maine’s largest city, it is not known for certain whether it is having the intended effect of holding costs down.
A 2023 study that examined the policy and how it affected rents in the fall of 2022 was presented by the Portland rent board to city councilors on Wednesday. To a business lobbying group, the data in it are “pretty revealing” and suggest the units subject to rent control are charging higher rents than exempted units across all bedroom sizes.
But this is far from conclusive. While the study found that median rents charged in units exempt from rent control were slightly less than or equal to rents in those covered by it, there are issues with existing data. For one, Portland doesn’t require the landlords of exempt units to report their rent prices. Only 29 percent of them did so ahead of this study.
It is leaving some city officials looking for ways to gauge the effects of the policy, while one expert said that three years is far too soon to gauge the long-term impacts of rent control.
“I suspect there are a lot of owners still evaluating their options, such as condominium conversion, selling their inventory, or changing ownership structures,” said Jeff Levine, a former Portland planner who teaches at the Massachusetts Institute of Technology. “These changes could take another [three to five] to years, or longer, to evaluate.”
Landlords have opposed rent control, and some say it is incentivizing them to keep rents high. But they have lost at the ballot box time and time again. Voters approved the current regime in 2020, later expanded the law and have twice voted down landlord-backed changes.
The current ordinance caps annual rent increases for most units in the city. For example, only a 2 percent increase is allowed in 2024. There are also protections for tenants. Owner-occupied units and accessory dwelling units such as in-law apartments are exempt from rent control.
Those units often are cheaper than more common types of apartments across the city. The report from the rent board members had to contend with that, alongside more than 5,000 units exempt from the law being reported by landlords as charging $0 for rent.
They were excluded from the rent board study because they would have biased the statistics and plummeted the means and medians of those units, said co-author Philip Mathieu, a Portland tenant and rent board member who is pursuing a master’s degree in data science at Northeastern University’s Roux Institute in Portland.
Mathieu added that the sheer number of exempt units which recorded a $0 rent indicates that many of them were incomplete or false reports.
“If you’ve got 50 units, or if you’ve got a lot of [subsidized units], it’s a lot of paperwork, and if you don’t have to, you’re probably not going to do it,” added Matt Walker, a Portland tenant and rent board member who also co-wrote the 2023 study.
Though he didn’t find the rent board study’s results to be all that significant as presented, Levine said that removing the units reporting a $0 rent “raised questions” about the conclusions.
“I am not convinced that was the right approach to this data, as there are legitimate reasons not to charge rent,” Levine said. “These may include renting to an elderly relative or a grown child.”
Aside from the rent board’s annual report, the city of Portland doesn’t have a plan on how to empirically evaluate the rent control policy and how it’s working. Mathieu would like to see an academic institution or consultant hired to examine it, as other jurisdictions have done.
The rent board issued a series of recommendations at the end of their 2023 report aimed at improving rent control and encouraging landlords to report “better data.” They include a public-facing tracking system that would show tenants a unit’s rent history and reasons for rent increases, and either barring landlords from reporting $0 rents and requiring an explanation.
“Perhaps other landlords will put in a little more effort and we’ll get slightly more people registering voluntarily, because that would help in the long run to understand this,” Mathieu said.
