Providence Mulls 4% Rent Cap As National Rent Control Debate Boils

The rent stabilization bug has hit Providence, RI.

Municipal officials there are jumping on the bandwagon with other cities and states whose local officials have adopted or are weighing the policy as a housing affordability strategy.​

Providence City Council President Rachel Miller, alongside council allies, introduced an ordinance this week that would cap most annual rent increases at 4%.​

The ordinance drops Rhode Island’s capital into the middle of a national fight. The issue is over whether rent rules intended to shield tenants from rent inflation actually achieve that objective, or rather, merely exacerbate already‑lagging ground-up housing construction.​

If the measure passes, Providence will become the first Rhode Island city with modern rent stabilization, echoing policies in places like Washington state, Montgomery County, Maryland, and Portland, Maine. In November, Massachusetts voters will decide whether to restore statewide rent control, three decades after state legislators abandoned the policy.​

For Providence, the initiative ignites a battle royale between a city council controlled entirely by Democrats and Democratic Mayor Brett Smiley, who opposes rent stabilization.​

As has been the case across the country, business groups have lined up to fight the proposed city ordinance.​

“The primary mechanism of the policy — a price cap — fails to solve the underlying housing shortage and instead discourages the production of new supply,” Rhode Island Public Expenditure Council wrote in a study commissioned by the non-profit business group The Providence Foundation.​

The organization’s conclusion aligns with what critics of rent stabilization across the country have said.​

National landlord organizations, developers and rental housing analysts and economists point to cities such as St. Paul, Minnesota, which adopted a strict rent cap. Once that change became effective, multifamily permits dropped sharply.

Officials there later rolled back the rules and added exemptions for new construction.

How Providence’s cap would work

The ordinance proposes to limit rent increases to 4% every 12 months for covered units, including between tenancies, with a “base rent” defined as whatever was charged 180 days before the law takes effect.​

The measure would also prevent landlords from banking unused increases to apply at a later date. They would also be barred from raising rents more than 4% when one tenant leaves and another moves in. That would close off a common escape hatch from local caps.

A new five‑member rent board – proposed with the new measure – would hear complaints and roll back illegal increases. It could levy fines of up to $250 a day. It would also consider landlord petitions to exceed the cap for a fair return, major improvements, or large property tax hikes.

The measure is peppered with carve-outs and exemptions intended to address the supply argument.​

Apartments would not be subject to the cap until 15 years after construction. Further, “mom‑and‑pop” landlords who live in buildings of three units or fewer would be exempt. In addition, they could shield one other property they own.​

City data show the owner‑occupied carve‑out alone would exclude more than 16,000 units. That number would be in addition to the total number of properties qualifying for the 15‑year window. Regulated affordable housing, dorms, and other institutional or short‑term lodging would also be exempt.​

Supporters see rent stabilization, not a freeze

A University of Rhode Island poll last year found roughly 72% of residents surveyed supported some kind of limit on annual rent hikes. Advocates cite the data point in their argument that rent stabilization has become a politically mainstream priority.​

City Council President Miller said at a press event on Tuesday that the city’s rents have risen by 16% over the past several years, citing a city council task force report last year that noted the negative impact on working‑class residents.​

“It means that far too often, a rent increase — even within 60 days’ notice mandated by state law — is an eviction notice by another name,” she said. “It has to stop.”​

Miller told the Boston Globe that the city is becoming one for “people who are vastly more wealthy, and I think we kind of owe it to residents to create some stability.”​

Tenant groups and council members frame the ordinance as a backstop in a housing emergency, not a cure‑all. They argue that capping increases at 4% will not cut anyone’s rent but will stop the double‑digit jumps that have become common in older buildings, especially for seniors and low‑wage workers.​

Miller said council leaders opted for a flat cap rather than a formula tied to inflation, like Portland, Maine’s, to keep the system simple and predictable for both landlords and renters.​

What’s next at City Hall

Miller will officially introduce the ordinance at today’s council meeting. A series of hearings will likely draw heavy turnout from tenants, small landlords, nonprofit developers, and market‑rate builders. Observers expect amendments to focus on reporting requirements and how the rent board evaluates “fair return” cases. They will also look at whether any additional carve‑outs will shield new projects or small owners.

Enough councilors have signaled support to pass the measure. However, they would need a two‑thirds vote to override a likely veto from Smiley.​ The mayor has argued that the ordinance will not lower anyone’s rent. He worries that landlords will respond by taking the full 4% every year. He has also warned they may not be able recoup costs later. That risk grows as taxes, insurance, and labor bills rise.

If the proposal survives largely intact, Providence could become a bellwether for how far local governments in Rhode Island can go in local ordinances to regulate rents without state‑level changes.​ For now, the city is the latest place to test whether a 4% cap can offer renters some security in a volatile market.

Or it will prove that it, too, scares away developers and supply.