A pair of schoolgirls walk by the entrance to Redbank Village in South Portland on Friday morning, May 27, 2022. Credit: Troy Bennett / BDN

A proposal under consideration in South Portland puts a lighter touch on rent stabilization relative to Portland, where developers and landlords have complained the rules stifle new building and upgrades to existing units. 

South Portland’s proposal, based on rent control laws in Oregon, would set less-strict caps than Portland’s rules on the units falling under rent control. Some city councilors also want it to be enforced through a civil process between the tenant and landlord rather than handled by a city board or department.

The City Council’s interest in rent stabilization was prompted by sudden and steep rent increases at the Redbank Village apartment complex last summer. It became a major story of the housing affordability crisis happening across the state but especially in southern and coastal Maine. 

Councilors said they already are hearing about 25 percent to 45 percent rent increases in the city, even among smaller landlords. But they are moving carefully to avoid unintended consequences, as other cities across the state demur on adopting rent control to help solve the housing crisis.

The City Council will hold the first of two public readings for comments on a rent stabilization ordinance proposal next month. The proposal would cap annual rent increases at 10 percent for landlords owning more than 15 rental units, although caps are still under discussion. 

The rent control ordinance approved by Portland voters in November 2020 applies to all rental units, including short-term rentals with some exemptions, including owner-occupied units with two to four dwelling units and Section 8 subsidized housing.

Portland allows landlords to raise rents every 12 months based on inflation, so for 2023 they can hike the fee 7 percent of the current rent. Landlords can go to the city’s rent board to get increases for major upgrades, but the annual rent hikes are capped at 10 percent or less.

“Portland’s rent control is more restrictive,” said Jeff Levine, a consultant and Portland’s former planning director. “South Portland’s proposal is fairly reasonable. It softens the sudden rent increase.”

He and Brit Vitalius, president of the Rental Housing Alliance of Southern Maine, an association of landlords, agree that it is too early to tell the effect of Portland’s rent control law.

South Portland mayor Kate Lewis. Credit: CBS 13

But there have been worries about Portland’s rent control stifling developers who may not be able sell new apartment buildings at higher prices, and current owners converting their properties to condominiums to get more money for them.

“The group that wrote the referendum in Portland didn’t flesh out the consequences,” Vitalius said. “South Portland has had a deliberative process with great input.”

South Portland’s City Council has had four workshops that allowed public comment on the proposal so far. At a workshop last week, a majority of the councilors supported the proposal, with some cautioning that they need to include a provision to protect against evictions solely for the purpose of raising rents. Others said the city should not be involved in private business.

“It’s not the government’s place to tell people what they can charge,” Councilor Linda Cohen, who doesn’t support the proposal, said during the workshop.

Mayor Kate Lewis and others said they are very concerned about unintended consequences, both if the city acts on rent control and if it doesn’t. She supports the current proposal.

“The unintended consequence of doing nothing may be that hundreds of families are evicted,” she said at the meeting. “The 10 percent raise will be better than the 45 percent we’re hearing about if we do nothing, and it is very likely to come.”