Page 57 - AAGLA-NOV2021
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 Featured Story
The Narrative
Landlords cannot be allowed to raise rents to whatever they want, whenever they want. We need
Rent control reduces investment in a property’s quality and causes a city’s housing stock to decay. By suppressing property values, rent control also reduces tax revenue to municipalities, hindering their ability to provide essential services.
On the Record
“Rent control is best understood as an attempt at providing a welfare program for lower-income residents who might otherwise be unable to afford their housing. But it is one of the worst welfare benefits ever conceived, sending most of its benefits to the wrong people, actively harming others who are equally in need, all while reducing access to rental housing citywide.”
—Michael Hendrix, Director, State and Local Policy, Manhattan Institute
“Next to bombing, rent control seems in many cases to be the most efficient technique so far known for destroying cities.”4 So noted the socialist economist Assar Lindbeck in 1977. In a 2012 survey of leading economists, a mere 2% thought that price controls on rent improved the availability and quality of affordable housing.5 Then why hasn’t rent control destroyed the cities where it has been implemented? Because of the easing of these price controls since their adoption in the mid-twentieth century.6 That is, until now.
New York State recently strengthened and extended its rent regulations indefinitely.7 California lawmakers limited annual rent increases statewide to 5% plus inflation.8 And Oregon has approved an “anti-rent-gouging” law that limits annual rent increases to 7% plus inflation.9 Now Senator Bernie Sanders (I-Vermont), along with Representative Alexandria Ocasio-Cortez (D-New York), is calling for a nationwide, universal 3% cap on rents.10
There’s a simple reason that rent control is in vogue: America’s housing market is increasingly unaffordable. Since 1970, real housing prices have doubled in New York City and Los Angeles and tripled in San Francisco.11 About 25% of renters nationwide spend over half their income on housing, and their ranks are growing.12
The reason for skyrocketing prices is straightforward: demand is outstripping supply by 370,000 housing units a year nationwide because of rising regulatory costs, such as from local zoning limits on lot size or building height, and labor shortages reaching post-recession highs.13 Housing supply restrictions are keeping people from moving to more desirable cities.14
national rent control.”1
— Sen. Bernie Sanders
Rent Control Does Not Make Housing More Affordable
By Michael Hendrix, Manhattan Institute
  “Rent control is one of many tools that local jurisdictions can use to promote access to affordable
housing.” 2
— Sec. Pete Buttigieg
“It’s time that we stop commodifying the housing market because it is not a speculative investment, it is a basic right for all Americans.”3
— Congresswoman, Alexandria Ocasio-Cortez The Reality
Rent control is not the way to increase the amount of affordable housing, nor is it a solution to poverty, inequality, or segregation. Instead, it acts to restrict the supply of housing, transferring wealth to current tenants at the expense of future and market-rate tenants. Insiders—those living in rent-protected units—generally win at the expense of outsiders. In an effort to resist gentrification, rent control leads to the decay of the buildings, as owners have less revenue to spend on maintenance and improvements. Regulating rents, in short, does more harm than good overall.
Key Findings
Rent Control Makes It Harder to Find an Apartment
Cities that implement rent control see substantial declines in the availability of rental housing. Locking people in to existing rental units leaves many renters in apartments much larger or much smaller than they would prefer. In some cities, waitlists for rent-controlled housing are decades-long.
Rent Control Does Not Increase Diversity
Rent control benefits incumbent tenants at the expense of migrants hoping to relocate to a city. In New York City, white tenants have disproportionately benefited relative to black or Hispanic tenants, and landlords give preference to older and childless households. Many of rent control’s benefits typically flow to higher-income households even as rent control drives up rents for everyone else.
Rent Control Degrades the Quality of Its Beneficiaries’ Housing
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