Bill combatting rent gouging stalls in House

Sarah Hagen, Contributing Writer

A bill in the General Assembly sought to restrict rent gouging in Virginia localities by allowing the city to regulate how much a landlord can charge.

House Bill 721 stalled in the House of Delegates and will not be considered until next years’ General Assembly session.

The bill was introduced by Del. Nadarius Clark, D-Suffolk, at the beginning of the General Assembly’s regular session. The bill has been changed many times over the years, adding and taking away exemptions, according to Clark. The bill narrowly passed along party lines in the counties, cities and towns committee and will be continued to 2025.

The bill stated that at least two months’ written notice would be required by landlords before rent can be increased, and it cannot be raised by more than the “locality’s calculated allowance,” which would be tied to inflation.

Richmond localities would be able to decide whether or not they want to follow these provisions by holding a public hearing before adopting the ordinance.

The changing economy, inflation and gentrification have all contributed to rent-gouging in Virginia, with increases as high as 40% in certain areas, Clark said while introducing the bill.

“This destabilizes communities and forces people out of their homes,” Clark said. “Data shows that fewer Virginians can afford to buy a home than ever before, and there is a shortage of at least 200,000 affordable rental units here in the Commonwealth.”

Richmond has a history of redlining, the “discriminatory practice that consists of the systematic denial of services such as mortgages, insurance loans,” according to Cornell Law School.

Redlining disproportionately affected Black communities and still does today, devaluing property in marginalized neighborhoods while rent rises because of gentrification, according to a study by Harvard Medical School.

“In San Francisco, 87% of neighborhoods undergoing gentrification were once redlined as ‘hazardous,’” the study states.

Del. Rae Cousins, D-Richmond, is a patron of Clark’s bill. Cousins said she decided to sign onto the bill after speaking with constituents and voters during her campaign about rent increases in the city, which is one of the issues she ran on.

There are 87,693 renter households in Richmond and Chesterfield County with an average rent of $1,203, according to data from the Eviction Lab.

Around 52% of Richmond renters spent 30% or more of their income on rent in 2022, according to a report by AXIOS Richmond. This is higher than the percentages in New York City, Chicago, San Francisco, Washington D.C. and the national average.

Cousins did not have to deal with rent-gouging herself when she rented in Richmond because her work as an attorney, access to legal resources and knowledge of housing laws is what protected her, she said.

“I know that a lot of people in the city who live in marginalized communities do not have that same access or even knowledge of the law,” Cousins said. “That is something that I am championing for here in the House of Delegates.”

Landlords have an attorney present at hearings 80% of the time, but only 0.4% of Richmond tenants had legal representation in court in 2022, according to data from the RVA Eviction Lab.

“When people don’t understand the law, don’t understand their rights, it’s very easy for landlords to take advantage of that,” Cousins said. “I think that’s why it’s our job here at the General Assembly to make sure we have protections in place for tenants.

Cousins is currently the chief patron of two other bills focusing on housing: HB 740 and HB 1251.

HB 740, if adopted, will streamline the rent contesting process, moving the final judgment to the first hearing rather than requiring a second. Cousins said she introduced this bill because tenants were being evicted between the two hearings.

Cousins introduced HB 1251 to provide equal access to justice for all tenants. The requirement in the Virginia Residential Landlord and Tenant Act that tenants must be up to date on rent before taking legal action against their landlord will be removed if the bill passes.

Rent fluctuates regularly, sometimes at dramatic rates, and apartment prices can be different depending on where it is in the city, according to Benjamin Teresa, co-founder and director of the RVA Eviction Lab and associate professor.

Teresa describes RVA Eviction Lab as a “community responsive research center” because the lab partners with organizations that work alongside tenants facing eviction and housing instability.

“Almost all of the work we do — the data we collect, the analysis we do, the reports we write — are really driven by the kinds of questions and needs that our community partners have,” Teresa said.

Teresa said the sharp increase in rent during the pandemic is still having an effect on current rent prices, and it has increased instability and the burden on tenants and communities.

“There’s a direct correlation between high rent prices and eviction and pressure on tenants,” Teresa said.

Eviction through the courts is not the most common way for tenants to lose their housing. Tenants typically lose their housing through a terminated lease, or a renewed lease with a dramatic rise in rent, according to Teresa.

A study by Teresa for RVA Eviction lab found the racial composition of neighborhoods is a significant factor in determining eviction rates, and as the Black population increases, eviction rates increase.

“I think these kinds of laws go to the heart of what is the most common way that people lose their housing,” Teresa said.

Teresa rented in New York City during his doctorate program and lived in a rent-stabilized building. He said this meant he would always get the opportunity to renew his lease, and he could anticipate how much a rent increase would be. HB 721 would allow localities to establish anti-rent gouging boards that work similarly, according to the bill.

“Predictability and civility is not just good for a tenant, it’s also to the advantage of the landlord to have a stable tenancy,” Teresa said. “You can say, ‘I know as an owner that my building will always be occupied if I want it to be.’”

HB 721 could open the door for similar housing and rent-focused legislation if it passes, according to Teresa.

“I think that success breeds success,” Teresa said.