Advocates for overturning Illinois’ statewide ban on rent control walked away empty-handed from this spring’s landmark legislative session, but that didn’t make the state’s real estate industry breathe any easier.
Facing an energized activist movement, bills advancing through other state legislatures and an early blessing from Gov. J.B. Pritzker, property owners and their advocates are digging in for campaign’s inevitable reemergence in Springfield next year.
“All pieces of legislation are zombies, and (rent control) is like Friday the 13th,” said Brian Bernardoni, a lobbyist and director of policy for the Chicago Association of Realtors. “No matter how many times you thought you killed Jason, he’s going to keep popping up again and again.”
In 2017, state Rep. Will Guzzardi introduced legislation to overturn the state’s 1997 Rent Control Preemption Act, which prohibits local governments from regulating apartment rents. Rep. Mary Flowers, who represents a slice of the city’s South Side, later introduced a bill to take a step further, establishing rent control boards around the state.
The bills went nowhere until last year, when voters swept Pritzker and Democratic supermajorities into the state capitol. During his campaign, Pritzker said he would support overturning the rent control ban.
After the election, Realtors and landlord groups like the Chicagoland Apartment Organization geared up for an all-out messaging war to keep either bill from gaining traction. They declared victory in March, when a House subcommittee rejected Guzzardi’s bill by a 4-2 vote.
Guzzardi said he was “disappointed but not surprised” at his bill’s fate, given the intense lobbying, and that his legislative allies will meet during the summer for a “debrief session” to “talk about what worked, and come up with a strategy” for a new approach. That could mean re-introducing the same bills, or drafting new legislation, for next year’s session.
Rent control advocates will study the package of bills passed by the New York state legislature that would tighten rent regulations and open the door for municipalities around the state to enact their own rent controls.
Seeing legislators reach a deal in a state whose political and demographic makeups resemble Illinois’ made Guzzardi “optimistic” for his own bill’s chances, he said. But the total absence of existing rent control in Illinois makes legislation a heavier lift, the Northwest Side Democrat added.
“New York has been able to look at concrete examples of what has and hasn’t worked, and think about how to make it stronger,” Guzzardi said. “But in Illinois, our hands our tied by this prohibition. So a lot of the arguments are speculation and straw-man and ‘What if.’”
Landlords and brokers in New York are scrambling to stop the suite of rent regulation bills they say would cripple their businesses, while their counterparts in Chicago look on in horror.
The measures should motivate local landlords to crank up their own lobbying efforts, said Bernardoni, who called the proposed New York rules “jaw-dropping” and “knee-buckling” for property owners.
“This is a sweeping attack on residential real estate and private property rights,” Bernardoni said. “I don’t understand how anyone can expect (apartment owners) to pay for rising property taxes and utility costs under these kinds of constraints.”
The industry also is keeping an eye on Oregon, where lawmakers passed a measure earlier this year to implement a statewide rent control program.
Even without any wins on the board, the Illinois rent control movement is “putting a cloud” over the Chicago’s real estate market, Bernardoni added. And it heightens the industry’s apprehension over more immediate concerns, like Cook County Assessor Fritz Kaegi’s steep hikes on tax assessments for some commercial buildings, he said.
The industry is bolstering its lobbying against rent control with efforts to remove restrictions on building new apartments, which they argue would do more to alleviate the city’s deepening affordable housing crisis.
Landlord groups supported a $200 million boost in the state’s capital budget to fund the construction of more affordable housing, according to Michael Mini, executive vice president of the Chicagoland Apartment Association. The association also supported bills sponsored by state Rep. Sara Feigenholtz and Rep. Omar Aquino that would have allocated more money to rental assistance and incentives for construction of affordable housing. Neither bill passed.
“We recognize that advocates are not going to back away from this issue, so we’re continuing our efforts to educate the general public about why rent control is not the right answer,” Mini said. “This is an issue of supply, and we’re trying to advocate policies that create more market-rate and affordable housing.”
Rent control advocates plan to meet with Pritzker’s staff to get his support behind a renewed push next spring, according to Jawanza Malone, executive director of the Kenwood Oakland Community Organization and a co-founder of the Lift the Ban Coalition to legalize rent control. Meanwhile, the organizers will huddle with advocates in New York and Oregon to learn more about what they did right.
“The important lesson coming out of the New York victory is that its legislators felt compelled to respond to the crisis that exists,” Malone said. “Our legislators in Illinois have to follow that same example, and have some hard conversations with representatives of the real estate industry about what needs to be done to fix it.”
via The Real Deal Chicago
June 13, 2019 at 10:12PM