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Orlando landlords are suing Orange County, Florida, to challenge a rent cap proposal that\\u2019s 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.

Hi, I\'m Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.

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\\u2019s a very high bar that the county must reach to get this approved. According to state law, a city or jurisdiction must prove there\\u2019s 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 \\u201cfundamentally flawed.\\u201d She says: \\u201cIt is unfortunate that a majority of the Orange County Commissioners disregarded (state) law and instead moved to place this measure on the ballot.\\u201d

The CEO of the Florida Realtors group, Margy Grant, told the Sentinel: \\u201cStudies show that rent control has unintended consequences that can make matters worse.\\u201d She says: \\u201cA better solution would be to pursue public-private partnerships that result in more affordable housing units.\\u201d

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\\u2019t 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: \\u201cIt is extremely unlikely that the shortcomings of the current residential rental market in Orange County\\u2026 be deemed the type of dire emergency which must exist before a local government in Florida can adopt an enforceable rent control ordinance.\\u201d

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\\u2019s and 70\\u2019s before the state law was passed. (2)

You\\u2019ll find a link to the Orlando Sentinel article in the show notes at newsforinvestors.com. If you\\u2019d 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/