Rent Control Preemption Summary

What you need to know! ,

As we await the Governor’s signature on House Bill 430, which includes Ohio’s new rent control preemption language, we wanted to provide a quick wrap-up and next steps.  Given recent events in the General Assembly and the difficulty in crafting and passing a measure that many would see as a serious challenge to local home rule powers, it was a remarkable effort that was accomplished in just over a month’s time.

 On April 21, a group of Columbus residents filed a proposed initiative with the City that would create a new Department of Fair Housing that would be tasked with licensing landlords and running a residential rent control program. 

 On May 5, 2022, the Columbus Apartment Association’s (CAA) Public Policy Committee recommended retaining the Calfee, Halter & Griswold law firm to represent CAA to fight the local ballot initiative and work with a broad coalition at the Statehouse to pass a statewide rent control preemption.

 The CAA Executive Committee authorized the necessary expenditures to cover the local and state efforts. To manage the efforts locally and at the State, the CAA Executive Committee authorized Stephen Papineau, CAA President; Don Brunner, President of the National Apartment Association (NAA) and Treasurer of the CAA; Jeff March, NAA Legislative Chair and CAA Public Policy Committee member; Laura Swanson, CAA Executive Director and Steven Gladman a consultant retained by CAA, to all serve on the management committee. They all played an important role in successfully passing a state rent control preemption.

 A diverse group of interested parties, led by the CAA, the Ohio Apartment Association (OAA), and the Ohio REALTORS, quickly coalesced to explore the opportunity to enact a state preemption.  Members also included the Ohio Real Estate Investors Association, the Ohio Manufactured Homes Association, the Ohio Chamber of Commerce, the Columbus Partnership, the Ohio Mortgage Bankers Association, and the Ohio Homebuilders Association.  

 After a draft of rent control preemption language raised home rule issues last fall with the Legislative Service Commission’s (LSC) attorneys, the Ohio REALTORS engaged outside legal counsel in late April to craft a new draft based on previous successful preemption efforts.  With assistance from the attorneys at Calfee, as well as input from the Columbus Partnership, a new amendment was drafted using RC 5321.19, the existing landlord-tenant preemption statute, to make it clear that rent control and rent stabilization are preempted under current law and that protects existing city programs to incentivize affordable housing development.  The new language: 

  • Defines “rent control” and “rent stabilization” 
  • States that no political subdivision may enact, adopt, renew, maintain, enforce or continue in existence any [law] that is in conflict with Chapter 5321 or that regulates the rights and obligations of parties to a rental agreement, “including, without limitation, by any way imposing or requiring rent control or rent stabilization.”
    • In other words, no one can enact rent control or rent stabilization laws.
  • The preemption does not apply to laws regarding:
    • Housing, building, health or safety codes
    • Laws that regulate the rent charged by a political subdivision for residential premises that the political subdivision owns or operates
    • Laws to implement a plan to use voluntary incentives or agreements that regulate rent so long as the agreement is to increase or maintain the supply or improve the quality of available residential premises (i.e. tax abatements, loans, grants, etc.)
  • Includes a series of legislative findings on the (1) importance of housing and (2) why rent control is not good 

 The legislative findings section was included so that any reviewing court is clear that the General Assembly intended this to be a statewide preemption to withstand challenges under home rule grounds.  

 While the drafting was progressing throughout May, Calfee, representing CAA and OAA and the REALTORS led the lobbyist team in contacting the Senate and House majority leadership teams to engage them in supporting this effort and establishing a process to move forward.  With the Senate President’s support, a House Bill pending in the Senate Energy and Public Utilities (EPU) Committee, chaired by Senator Rob McColley, a strong supporter of our effort, was identified as a vehicle.  Lobbyists continued to meet with leaders, their staff, and Senate Republicans on the committee to shore up support, along with meeting with the Governor’s staff to prepare for signing.  It is important to note our work benefitted from the strong support of both Senate President Huffman and House Speaker Cupp – without their support, this effort would not have happened so quickly.  

 In the week before Memorial Day, final touches were put on the amendment language – with many calls between Calfee, OAA and CAA, the Columbus REALTORS and their counsel, the Columbus Partnership, and finally with LSC for the final draft.  Part of this effort was to make the draft as narrowly tailored as possible to deter loud opposition.  In discussion with housing advocates, like COHHIO, despite their generally negative view of rent control, they expressed reservations about the breadth of the language.  It should be noted that while the Poverty Law Center did send a letter to the General Assembly expressing similar concerns with the language, no one appeared in the committee to testify in opposition.

 On Tuesday, May 31, the Senate EPU Committee met for a final hearing on House Bill 430.  The committee included the rent control preemption language. It took in-person proponent testimony from Don Brunner on behalf of OAA, CAA, and NAA, Brent Crawford of Crawford Hoying (developer), Buffie Patterson (Columbus realtor), and John Kulewicz (the REALTORS’ attorney).  The questioning was minimal, and the committee vote was 10-2 on the addition of the amendment to the bill and on the bill itself.  All Republican members voted in favor and two Democrats voted against. Senator Sandra Williams recused herself from voting.

On Wednesday, June 1, the Senate put House Bill 430 up for a floor vote, where it passed 25-6 on party lines.  The bill was then sent to the House, which voted to concur by a vote of 55-28.  The bill now heads to the Governor for signature.  Once he receives it, which may take a couple of days, he will have 10 days to (1) sign the bill; (2) allow the bill to become law without his signature, or (3) veto.  We expect he will sign the bill.  Upon his signature, the bill will become effective in 90 days.

 All in all, a great win that we should all take pride in.  Please let us know if you have any questions.

 

Laura Swanson
Executive Director, Ohio Apartment Association