Orlando Landlords Sue County Over Rent Cap Proposal

Orlando landlords are suing Orange County, Florida, to challenge a rent cap proposal that’s headed for the November ballot. Attorneys for two major real estate groups filed the lawsuit in mid-August and are seeking an injunction to keep it from going before voters. They say the proposal violates state law which bans rent control under most circumstances.

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If the measure is approved, it would not apply to single-family rentals or vacation homes. It would only apply to multi-family units, and cap any rent increases to the rate of inflation as determined by the Consumer Price Index. The ordinance would last one year, and would need to be renewed by another vote to continue.

But there’s a very high bar that the county must reach to get this approved. According to state law, a city or jurisdiction must prove there’s a housing emergency and that rent control would solve the problem before it can impose any kind of rent control.

Ballot Measure Approved by Slim Margin

In a 5 to 4 vote, county commissioners approved the ballot measure about a week before the lawsuit was filed. It was discussed and debated four times before it went to a vote. Both tenants and landlords went before the commission to argue their sides of the situation.

Tenants cited skyrocketing rents that many say they can no longer afford. Landlords argued that higher tax bills, insurance premiums, and other expenses are forcing them to increase rents.

Landlords Say Rent Control Will Make Matters Worse

Florida Apartment Association representative, Amanda White, told the Orlando Sentinel that the proposed ordinance is “fundamentally flawed.” She says: “It is unfortunate that a majority of the Orange County Commissioners disregarded (state) law and instead moved to place this measure on the ballot.”

The CEO of the Florida Realtors group, Margy Grant, told the Sentinel: “Studies show that rent control has unintended consequences that can make matters worse.” She says: “A better solution would be to pursue public-private partnerships that result in more affordable housing units.”

Orange County Mayor Jerry Demings voted against the proposal, saying it will probably trigger a lawsuit that would be difficult for the county to defend because of the state law. And he was right. The county now faces a lawsuit, and attorneys representing the plaintiffs want to fast track the case to get the issue resolved before the election.

Tenants Say They Can’t Afford Rent Increases

Among the arguments offered by tenants and rent-cap supporters is a 32% average increase in rent over a two-year span, from June of 2020 to June of this year. The average rent went from $1,357 to $1,799, according to rent-tracker CoStar.

Tenant advocates also cited a high level of requests for rental assistance in Orange County. It was reportedly more than $200 million in federal, state, and local rental assistance funds, and the most among all of the counties in Florida.

This is the first time that a local government in Florida has tried to impose rent control since the state law against rent control took effect. Lawyers arguing against the proposal say: “It is extremely unlikely that the shortcomings of the current residential rental market in Orange County… be deemed the type of dire emergency which must exist before a local government in Florida can adopt an enforceable rent control ordinance.”

Of course, this lawsuit is being closely watched by other jurisdictions. A headline in another publication asks whether Miami will be next. The city of Miami Beach does have rent control that was implemented back in the 60’s and 70’s before the state law was passed. (2)

You’ll find a link to the Orlando Sentinel article in the show notes at newsforinvestors.com. If you’d like to learn more about owning single-family rentals, please hit the join link on our website. And please remember to hit the subscribe button, and leave a review!

Thanks for listening. I'm Kathy Fettke.

Links:

1 -https://www.orlandosentinel.com/news/orange-county/os-ne-orange-rent-control-lawsuit-20220817-4bmmdtmq5zbq3e4zj5tij4imti-story.html

2 -https://fortune.com/2022/08/20/florida-landlords-try-to-halt-rent-control-initiative/