After a proposed rent hike at Redbank Village Apartments – which has traditionally rented to lower-income individuals and families – the South Portland City Council is on the cusp of deciding whether to pass a citywide rent control ordinance.

The proposed limits have seen mixed reviews from city officials so far.

The council is planning a first reading vote on the proposal, which caps annual rent increases at 10%, tomorrow night. If it passes, the council will vote again at a second reading in March. 

If the measure survives both votes, it will take effect on May 27.

The issue made headlines in May 2022, when a property owner based in Los Angeles purchased Redbank Village Apartments, a complex of 250 duplexes built in the 1940s in South Portland, then announced rents would increase as much as $600 per month.

Nicole Bernier, housing choice voucher program manager at the South Portland Housing Authority, said the increases would be particularly hard on residents who were on Section 8 vouchers.

Bernier said at the time of the purchase there were at least 55 tenants living on the vouchers in the complex. While she couldn’t provide an exact number, she said she knew the promise of higher rents has already driven some of those voucher holders to move out.

She said officials put a moratorium in place capping rent increases at 10% while the city considered what to do.

Bernier said rents have been steadily rising in recent years, putting landlords citywide into the position of not needing to seek out new tenants.

“We used to have landlords call us up all the time and say, ‘Hey, do you have anybody looking for a place?’” she said. “I haven’t had anybody call me in years.”

One-bedroom units at Redbank Village are on the market for $1,734 a month, whereas a three-bedroom unit goes for $2,225.

According to the U.S. Census, median rent in South Portland in 2021 was $1,465. The median income was nearly $74,000 or over $6,200 a month.

The council has analyzed the potential impacts on a permanent 10% cap during a series of workshops throughout 2022 and early 2023. 

In one presentation in June 2022, officials reviewed a study done by the University of Minnesota, which examined rent control measures put in place in four cities the council described as “peer” cities to South Portland: Oakland, California;, Portland, Oregon; Newark, New Jersey and Sacramento, California.

The analysis found rent control did succeed in keeping rents low and “moderating price appreciation.”

However, the analysis also found that studies were mixed as to whether rent control benefited those who needed assistance.

The study also found that rent control can prompt landlords to get out of the rental business, taking their properties with them. 

“[E]mpirical research is clearer that rent regulations can incentivize property owners to withdraw rental units from the market through condominium conversions, owner move-ins, or tear downs,” officials wrote in their summary of the study.

“I’m very much against this ordinance,” said City Councilor Misha Pride.

Pride said he is concerned rent control will have similar impacts in South Portland. He said right now, some landlords only raise rents when they absolutely have to, in order to reduce the burden on tenants. 

Those occasional increases, however, tend to be higher than 10%, Pride said, meaning if the cap is put in place, landlords could opt to simply raise the rents 10% every year, which could burden tenants more in the long term, not less.

“In a bad year, they can’t raise rents, and then in a good year keep them low,” Pride said. “They have to, every year, account for the potential bad year next year and say, ‘I’m going to raise rents by the maximum.’”

Pride, who said he used to live in the Redbank Village Apartment complex, said he can understand why renters there might be upset.

“We had a bad actor take over a very large development,” he said, but added that a citywide policy is not necessarily the answer. Instead, individual cases should be taken up with the state attorney general’s office and other authorities for possible legal action.