Rent regulation

Rent regulation is a system of laws, administered by a court or a public authority, which aim to ensure the quality and affordability of housing and tenancies on the rental market for land. Comprehensive rent regulation is common in Commonwealth and European Union countries, including Canada, Germany, Ireland, Cyprus and Sweden, and also some states in the United States. Generally a system of rent regulation involves:

The classic objective is to limit the price that would result from the market, where an inequality of bargaining power between landlords and tenants produces continually escalating prices without any stable market equilibrium. In 1992, a survey of 464 American economists found that 76.3% "generally agreed" that "a ceiling on rents reduces the quantity and quality of housing available", while 6.5% disagreed and 16.6% agreed but with provisos. However, many US states maintain rent controls, and a majority of OECD countries maintain rent regulation laws, which enjoy considerable popular support, and support in economic theory.

In Canada there are rent regulation laws in each province. For example, in Ontario the Residential Tenancies Act 2006 requires that prices for rented properties do not rise more than 2.5 percent each year, or a lower figure fixed by a government minister.

German rent regulation is found in the Civil Code (the Bürgerliches Gesetzbuch) in §§ 535 to 580a, and particular rights for tenants on termination are in §§568 ff. Rental price increases are required to follow a "rental mirror" (Mietspiegel), which is a database of local reference rents. This collects all rents for the past four years, and landlords may only increase prices on their property in line with rents in the same locality. Usury rents are prohibited altogether, so that any price rises above 20 per cent over three years are unlawful. Tenants may be evicted against their will through a court procedure for a good reason, and in the normal case only with a minimum of three months' notice. Tenants receive unlimited duration of their rental agreement unless the duration is explicitly halted. In practice, landlords have little incentive to change tenants as rental price increases beyond inflation are constrained. During the period of the tenancy, a person's tenancy may only be terminated for very good reasons. A system of rights for the rental property to be maintained by the landlord is designed to ensure quality of housing. Many states, such as Berlin, have a constitutional right to adequate housing, and require buildings to make dwelling spaces of a certain size and ceiling height.

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