For landlords in California and Maine, Nov. 3 revealed more than just the next president: It also heralded in the next era or rent control or, in some cases, the lack thereof. Residents of Portland, Maine, and the entire state of California voted on major rent control measures on Election Day. The results? They definitely weren't consistent.
In one spot, stricter rent control was shot down -- yet again -- by a clear majority. In the other? Residents voted to cap rent increases and more closely regulate landlords by almost the same margins. Which was which? The answer might surprise you.
California's voters on rent control
In California, voters were weighing in on Proposition 21, a move that would have limited a rental property owner's ability to raise rents on vacant units. It also would have expanded rent control to single-family properties, condos, and townhomes. (Under current state law, rents are only limited on apartment and multifamily units -- and even then, just on those built before 1995.)
Overwhelmingly, California voters shot down the measure: 60% to 40% across the state. The only counties in favor of Prop. 21 were Alameda and San Francisco, both located in the Bay Area.
The results aren't too surprising. According to rental platform Zumper, California is home to the most expensive market in the country, San Francisco. Additionally, more than half of households in both counties are renters.
A look at the recent past also hinted at how Prop. 21 would fare. Proposition 10, which would have repealed the current Costa-Hawkins Rental Housing Act and implemented stricter rent control, was defeated by a 59% to 41% majority at the midterms in 2018.
Portland takes a different turn
Over in Portland, Maine, the results were a different story. There, voters passed sweeping rent control measures by a 57% majority.
The move now caps local landlords at annual rent increases of no more than the current rate of inflation (about 1.2% as of October).
It also incentivizes landlords to provide at least 90 days' notice to tenants they want vacated, and it creates a local tenant-landlord board, which would weigh in on certain rent increases, as well as help mediate disputes.
The bottom line
Before investing in a new market, it's critical you do your research. Every municipality has its own unique rental regulations, and those could play into your success (and your profits) as a landlord.
Not sure about rent control measures in a market you're considering? Contact a local real estate attorney, real estate agent, or the city housing department. They should be able to point you in the right direction.