Statement by the President Upon Signing the Housing and Rent Act.
I HAVE today given my approval to H.R. 1731, the Housing and Rent Act of 1949, which extends rent control for 15 months until June 30, 1950.
This act is a result of the joint efforts of the Congress and the administration to find an equitable solution for a difficult problem. While affording more effective protection to tenants against illegal or unjustified rent increases, the act also facilitates the making of adjustments necessary to correct injustices against landlords In particular, the act will be helpful in the case of any small landlords who may not be obtaining an adequate net operating income.
Specifically, the act strengthens rent control in the following respects:
1. It gives the Housing Expediter the authority to regulate evictions. He has not had this authority since June 30, 1947. Since that time, the fear of evictions has been one of the major factors leading to a black market in rents. The restoration to the Housing Expediter of the right to control evictions will make it possible to curb this black market.
2. It gives the Housing Expediter the right to sue for treble damages for violation of rent ceilings. He has not had this authority since June 30, 1947. This will provide another powerful weapon to curb the black market in over-ceiling rents.
3. It gives the Housing Expediter the authority to recontrol on his own initiative any area he may decontrol hereafter. It also permits him, upon the recommendation of a local rent advisory board, to establish rent control in any area not now controlled. The Housing Expediter has not had authority, since June 30, 1947, to establish rent control in new areas or to recontrol any decontrolled areas.
4. It requires approval by the Housing Expediter before additional units created by conversion may be decontrolled. Since June 30, 1947, such decontrol has been automatic. The new provision will assure that decontrol will be permitted only for genuine conversions and will prevent evasive practices and pseudo-conversions which have been taking place since June 30, 1947.
5. It brings back under rent control a number of types of accommodations which have been decontrolled since June 30, 1947. Among these are accommodations not rented for any successive 24-month period between February 1, 1945, and March 30, 1948, trailers and trailer space, except those used exclusively for transient occupancy; and permanent hotel accommodations in cities with a population of 2 1/2 million or more, except in predominantly transient hotels.
6. It does away with the much-abused procedure permitting so-called voluntary leases with rent increases up to 15 percent. This removes the possibility of coercion by landlords to make tenants sign such leases in the future, and eliminates the practice of requiring tenants to sign such leases before they can rent vacant units.
7. It restores to the Housing Expediter the authority to obtain all necessary information by direct testimony or from records and to use the power of subpoena for this purpose whenever necessary. The Housing Expediter has not had this power since June 30, 1947.
8. It requires landlords who receive rent adjustments to certify that they are maintaining and will continue to maintain all services furnished on the date determining the maximum rent.
In short, the act establishes an effective system of rent control administration-remedying weaknesses in the present law which tend to make rent control ineffective because of inadequate enforcement powers.
With respect to decontrolling areas where rent control is no longer needed, the act gives new responsibility to the States and to incorporated cities, towns, and villages. In doing this the act extends the principles underlying the operation of local rent advisory boards, that is, the granting of greater discretion to local authorities to say whether Federal rent control is necessary in their localities.
The act provides that in order to obtain decontrol, an incorporated city, town, or village must hold a public hearing after 10 days' notice and must make a finding as a result of that hearing, that there no longer exists such a shortage in rental housing accommodations as to require rent control. Furthermore, such determination to decontrol must be approved by the Governor of the State. I urge local authorities in reaching their decisions to examine all the facts carefully and to exercise their best judgment in the interest of all the citizens in their communities.
The act provides that in making adjustments the Housing Expediter shall assure landlords a "fair net operating income." This provision does not create an administratively unworkable standard of "fair return," nor does it mean a general rent increase for all tenants. Rather, it provides an equitable standard for adjustments where they are needed.
This act was passed by the Congress despite the propaganda barrage which was designed to destroy rent control altogether. In its final form, it represents a crushing defeat for the real estate lobby.
The passage of this effective rent control law clearly demonstrates the purpose of the Congress to maintain adequate protection for tenants until the housing shortage is relieved. By this action, the Congress has reemphasized the necessity for the prompt enactment of legislation which will help to relieve the housing shortage.
Note: As enacted, H.R. 1731 is Public Law 31, 81st Congress (63 Stat. 18).
Harry S. Truman, Statement by the President Upon Signing the Housing and Rent Act. Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/230084