Some policy initiatives are so misguided that tweaks to make them more palatable are pointless.
So it is with Mayor Brandon Johnson’s proposal to give tenants in Chicago striking new powers against landlords.
The Johnson administration, as the mayor appears set to run for reelection, has floated a “compromise” version of its Protecting Renters Ordinance that keeps intact most of the objectionable parts of the proposal as it was introduced in late June but makes them slightly less onerous.
As the administration pushes for City Council votes this month, aldermen shouldn’t be fooled. In a time where a shortage of housing has led to higher rents, raising costs for owners of rental housing simply will exacerbate the problem. Not only will such action push rents higher than they would go otherwise, it will discourage investment in rental housing, particularly among smaller landlords that make up a substantial percentage of Chicago’s housing stock.
So what are the big concessions Team Johnson is making to win votes from skeptical aldermen?
Owners of apartments with six units or fewer now would be exempt from having to compensate tenants whose leases aren’t being renewed for any reason other than a “just cause,” defined as things like meaningful violation of lease terms, non-payment of rent or the need to do major repairs on the unit. But get this: That protection only would be provided if the building owner lives onsite.
Why is that a dividing line? Aren’t you a small landlord if you own, say, a three-flat whether you live there or not?
The administration also has reduced the amount a landlord would have to compensate a tenant whose lease isn’t being renewed for something other than just cause. That amount now would range from $4,000 to $7,500, down from $5,000 to $10,000 in the initial version, according to Block Club reporting.
And the administration has added a one-year “grace period” during which landlords wouldn’t have to compensate non-renewed tenants, responding to landlord complaints that it takes at least that long to determine whether a relationship with a new tenant is working out.
Johnson’s new version, while slightly less punishing to landlords, exhibits the same problems inherent in his initial proposed ordinance. There are many reasons to non-renew a tenant beyond clearly unacceptable behavior such as non-payment of rent. It’s not possible for any law to capture all the ways tenants can be a nuisance, not just to their landlord but to their neighbors. Forcing landlords to pay people to go away not only is unfair; it’s costly and will be reflected in the rents paid by all.
There’s no doubt it’s a tough time to be a renter in Chicago these days. The solution to the problem is to build more apartments and alleviate the supply-and-demand imbalance that is giving landlords the upper hand in the market. Cycles come and go; no doubt at some point in the future tenants will regain more negotiating power.
The last thing the city should do right now is to put even more upward pressure on rents.
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