Bill restricts local government from implementing rent control
(Daily Montanan) A bill to prohibit local governments from enacting rent control on private property was critiqued in a hearing as redundant in Montana law and out of touch with the needs of Montana families.
The Deputy Director and Legal Counsel for the Montana League of Cities and Towns Thomas Jodoin testified in opposition to the bill Tuesday morning.
“I am not here today to debate the pros and cons of rent control,” Jodoin said before the Senate Committee of Business Labor and Economic Affairs. “I would like to point out that if cities had the power to impose rent control, I suspect they would have already attempted it.”
Jodoin pointed to the “powers denied” section for local governments in the Montana Code Annotated, which lists “any power that applies to or affects landlords,” as one of the restricted powers of municipalities.
Sen. Majority Leader Steve Fitzpatrick, the sponsor for SB 105, said that to a certain degree the bill is already covered in law, but this bill was broader as it pertains to both residential and commercial property.
In his introduction of the bill, Fitzpatrick recognized increasing rents, “but ultimately, I think studies and economic data has shown that control actually leads to a decrease in housing over time because people don’t feel that incentive to go build houses.”
A Brookings Institute report from 2018 found that although rent stabilization helps tenants in the short-term, it decreases affordability in the long term and that landlords who can’t raise rents wouldn’t spend on maintenance of the property as they couldn’t recoup their investment.
Rent stabilization efforts garnered lots of support across the country during the 2022 midterm election, with efforts towards expanding stabilization passing in municipalities in states from Maine to Florida to California.
Rent control was not listed as one of the recommendations out of the Housing Task Force assembled by Gov. Greg Gianforte to address the housing crisis in Montana, as recommendations leaned towards incentivizing housing development.
Mandy Gerth, a field manager for advocacy group Forward Montana in Kalispell per her LinkedIn, said it was incredibly difficult for her family to find affordable housing after making a career change and earning entry-level wages.
She said having the option for rent controlled apartments would have likely been a positive thing for her family, as the waitlist for Section VIII housing, a federal voucher program, was long even with full-time work and good credit.
“Even though it isn’t currently being used anywhere in Montana, and really isn’t legal in Montana, I have no idea why we put an obstacle to any form of affordable housing during this housing crisis,” Gerth said.
Despite the idea of rent control being popular among some renters, more more supporters for the bill testified Tuesday from representatives of organizations around the state, for example the Montana Association of Realtors which said rent control discourages the production of new rental units and leads to less maintenance of the property.
“Ultimately, we should give property owners the right to set rents at the market rate and own property free of unreasonable controls by the local government,” said Sam Sill government affairs director for Montana Association of Realtors.
Charles Denowh of the United Property Owners of Montana said the state is one of few that does not currently preempt local government from enacting rent control.
“I think that leaves our property owners exposed to some risk,” Denowh said.
Gerth said that she moved three times in two years and spent more than $1,000 on application fees for rental units.
A bill draft from Rep. Kelly Kortum, D- Bozeman, would require application fees for residential rental units be refunded for applicants who don’t get units, with some stipulations, like the fees associated with specific services performed for those looking to rent, like the cost of background checks.
Kortum said the bill would likely be taken up by the House Local Government Committee but could also go to House Business and Labor.
“I will never forget the struggle, the stress and toll it took on me to look for a home for my family and asking you to please not restrict rent control,” Gerth said.