Congress tries striking new blow at rent controls

Congress is once again trying to lubricate the grinding gears of the rental housing industry -- with special attention to the sensitive matter of rent control.

The same thing was tried last November in a proposal to withhold federal housing subsidies to cities that applied rent controls to newly constructed units. But that provision was attached to a bill that failed.

Now the House Banking, Finance, and Urban Affairs Committee has approved a new measure that would withhold the same subsidies from rent-controlled cities that do not have "vacancy decontrol" -- a provision that removes an apartment from further rent control when it becomes vacant. The new proposal appeals to some in Congress as a way of moving the stagnating rental housing market away from restrictive controls without immediately abolishing them.

But leaders of rent-controlled cities are angered by the proposed federal moves. They disagree with urban planning experts and realtors who say rent controls distort the marketplace and ultimately make building and maintaining rental properties unprofitable. City officials as well as tenant groups remain vigorously devoted to rent control as a purely local option -- and they want it safeguarded from federal interference.

Some rent-controlled cities, like Boston and Los Angeles, already have vacancy decontrol and thus will not be directly affected by proposed federal cutoffs. But other communities with high rental turnover rates -- like Berkeley , Calif., and Cambridge, Mass., both of which are university communities --coming under the gun from Congress.

The City of Boston enacted vacancy-decontrol laws for its 40,000-to-45,000 rent-controlled units in 1976. But Cambridge and another neighboring community, Brookline, have not. Their combined 30,000 rent-controlled units are vigorously guarded by tenant groups and some state officials.

"If the federal government says 'no controls or no money,' our backs will be against the wall," says Massachusetts state Rep. Saundra Graham (D) of Cambridge. Without any controls, she adds, Cambridge "would go wild and go condo."

State Rep. John Businger (D) of Brookline has launched a resolution in the Legislature calling on Congress not to deny federal housing funds to rent-controlled communities. "This type of thing is a local decision," he emphasizes, adding that "Congress is punishing innocent people."

Despite the city's vacancy decontrol laws, Boston officials regard rent controls as a local option, says a spokesman for Mayor Kevin H. White (D). And a bill to limit condominium conversions for Massachusetts cities with less than 5 percent vacancy rates is currently under consideration in the Legislature.

In Los Angeles, approximately half of the city's 1 million rental units are under vacancy decontrol and thus are exempt from proposed federal controls. But other California cities, particularly Berkeley and Santa Monica, maintain stringent rent-control laws to cope with vacancy rates that remain stuck at a lean 2 percent.

Shawn Gordon, a spokesman for Berkeley Mayor Eugene Newport, described the recent federal moves as "the height of hypocrisy," adding, "It's an attempt by conservatives to supersede local control." In response, the Berkeley City Council unanimously passed a resolution asking Congress to reject its recent moves toward coercing cities into adopting vacancy decontrol.

In Washington, the District of Columbia Rental Accommodations Office estimates between 120,000 and 175,000 units are under a nonvacancy rent control and thus are vulnerable to federal housing cutoffs. When an apartment becomes vacant, the landlord is allowed a one-time-only 10 percent increase. Except for annual fuel adjustments, increases are usually permitted only by hardship petition.

Of all rent-controlled cities facing possible federal cutoffs, New York would suffer most. In 1980, the city received more than $13 million in federal housing subsidies. Having relied on rent controls since World War II, New York maintains 300,000 units under rent control and 900,000 under rent stabilization -- neither of which falls under the federal definition of vacancy decontrol. Mayor Edward I. Koch (D) is an avid defender of rent control who maintains such an apartment in Greenwich Village for less than $300 a month.

Says Roberto Mannaro of the Metropolitan Council on housing, "We cannot notm have rent co ntrol in this city."