Providence mulls 4% rent cap as national rent control debate boils

"The ordinance drops Rhode Island's capital into the middle of a national fight. The issue is over whether rent rules intended to shield tenants from rent inflation actually achieve that objective, or rather, merely exacerbate alreadylagging ground-up housing construction. If the measure passes, Providence will become the first Rhode Island city with modern rent stabilization, echoing policies in places like Washington state, Montgomery County, Maryland, and Portland, Maine."

"The primary mechanism of the policy a price cap fails to solve the underlying housing shortage and instead discourages the production of new supply, Rhode Island Public Expenditure Council wrote in a study commissioned by the non-profit business group The Providence Foundation. The organization's conclusion aligns with what critics of rent stabilization across the country have said. National landlord organizations, developers and rental housing analysts and economists point to cities such as St. Paul, Minnesota, which adopted a strict rent cap."

Providence City Council introduced an ordinance capping most annual rent increases at 4%, which would create modern rent stabilization in the city if passed. The proposal places Providence amid a national controversy over whether rent caps protect tenants or reduce housing construction. Business groups and fiscal analysts argue the price-cap mechanism fails to address housing shortages and discourages new supply, citing a Rhode Island Public Expenditure Council study. Developers, landlord organizations, and economists point to examples like St. Paul, where strict caps correlated with a sharp drop in multifamily permits and subsequent rule rollbacks. The mayor opposes the measure.

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