Chris Eccleston: There are better solutions than imposing rent controls

On behalf of the Salisbury Area Chamber of Commerce, thank you for the opportunity to share our membership’s concern with Mayor Jim Ireton’s proposed rent stabilization initiative. Our Chamber is committed to the success, economic vitality, health, and overall well-being of our community and its citizens and appreciates our active partnership with the City to ensure that these ideals are realized.

While we understand and appreciate the Administration’s desire to ensure affordable housing for all within the City’s corporate limits, we cannot help but voice our significant concern with this measure. As has been pointed out, this proposal is identical to the legislation that was passed in College Park in 2005, which was overturned in 2014 at the request of the surrounding community because of the problems that it had created. A College Park homeowners association noted that “the law caused more conflict and frictions among various stakeholders than building a healthy relationship” in addressing affordable housing issues. Additionally, the HOA stated that “more houses in the city are now staying vacant for a longer period of time, causing more vacancy related code enforcement issues.” Landlords attempted to get out of College Park’s rental industry and found it difficult to sell their rental properties in the stabilized environment. This led to an increase in vacancy rates and unfortunately led to an increase in blight, squatting, and property crime. Our hope is that this same situation would not be replicated in Salisbury; especially when we are already struggling to grapple with these issues.

The Chamber supports and advocates that we preserve the free market system that governs the rental industry in the City of Salisbury. Given the history of College Park’s program, we ask that we not attempt to try something that proved not to work in the community in which it was pioneered. Additionally, we believe that implementing this initiative will have the following negative impacts:

• Puts the burden of adjusting and accommodating income-based rental rates on the landlords, vs. using a subsidy model to support the tenants. Landlords should not be penalized because of the economic forces that have set the current rental rates throughout the area.
• This unfairly and unrealistically cuts rental revenue for property owners to the point that it guts their business models.  We predict many landlords will abandon their rental businesses as a result, which will have the net effect of providing fewer rental units and decreasing the size of the rental market.
• Creates a barrier to improvement and beautification of the properties for the property owners by cutting revenue and reducing their ability to improve and maintain their properties.
• Contributes to increased crime rates, squatting, blight and a general ‘downward spiral’ for those affected neighborhoods as money is not reinvested in the houses, or are possibly abandoned.
• In no way contributes or adds to the community’s long-term vision for Salisbury’s development, beautification, improvement and growth.
• Reduces the overall real estate market value within the city limits, which is especially unfair for home owning families who become victims of this initiative by lowering property values though out the City.
• This initiative was built around the concept of addressing low home ownership rates, yet effectively encourages a pattern of renting and avoiding ownership. Why would anyone want to buy if their rental rates are dropped to extremely low levels?

Let us be clear, though – we do agree with the Mayor and support his desire to ensure affordable housing for low income families; however, we believe that constructing residences like the Rivers Edge subsidized housing apartment complex is a preferable alternative to what the Administration is proposing here. It is our hope that we not damage the local rental housing industry in the name of providing affordable housing for those within our community that need it. We believe that there are constructive ways, as evidenced through successful projects in the past, to address this issue.

On behalf of the Salisbury Area Chamber of Commerce, we respectfully request that this legislation not move forward and, again, appreciate the opportunity to voice our concerns.

Chris Eccleston of Delmarva Veteran Builders is Senior Director of Business and Economic Development for the Salisbury Area Chamber of Commerce Board of Directors.