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Whitelaw and Sons Real Estate Morgan Hill
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Robert Whitelaw, Realtor®

Robert Whitelaw, Realtor®

Published:Jan 30, 2023

Born and raised in Silicon Valley, Robert has helped clients successfully buy, sell and invest in real estate throughout Santa Clara County. Robert uses his local market knowledge to help clients across Silicon Valley!

The data is clear, rent control does not work. Pushing for national rent control just makes a bad idea worse as the federal government attempts to impose a one size fits all policy for the wide variety of markets across the country.

Unintended Consequences

national rent control is a bad ideaNational rent control policies, while appearing to be a solution for the affordability crisis faced by renters in many cities, are actually a bad idea in practice. Such policies often come with unintended consequences that do more harm than good to both renters and landlords.

Reduces New Construction

One of the major drawbacks of rent control is that it discourages new construction. When landlords are not able to increase rent in response to market demand, there is less financial incentive for developers to build new rental properties. This can lead to a shortage of housing units and make the affordability crisis even worse. Additionally, many landlords may choose to convert their rental properties into condominiums or other forms of ownership, further reducing the number of rental units available.

Housing Quality Suffers

Another problem with rent control is that it can reduce the quality of housing. When landlords are not able to increase rent to cover the cost of repairs and upgrades, they may be less likely to invest in maintaining their properties. This can result in dilapidated buildings that are unsafe and unsanitary, causing harm to renters and the community at large.

Actually Unfair To Renters

In addition to these problems, rent control can also be unfair to renters. Rent-controlled units are often occupied by long-term tenants who are paying significantly less than market rate, while new renters must pay the full market rate. This creates a two-tiered system where some renters enjoy the benefits of lower rent, while others struggle to find affordable housing. It also disincentives mobility and discourages renters from moving when they may have to pay significantly more for rent elsewhere.

Depresses The Local Economy

Rent control can also have negative effects on the local economy – national rent control would just make it bad everywhere. When landlords are not able to increase rent to cover their expenses, they may be forced to reduce their spending on local goods and services, which can lead to a reduction in economic activity and job losses. Additionally, when rent control discourages new construction, it reduces the amount of money being spent on construction materials and services, which can have a ripple effect throughout the local economy.

Likely Abuse

Finally, rent control policies are often difficult to enforce, and can be subject to abuse. For example, landlords may try to circumvent the regulations by illegally evicting tenants or by making living conditions unbearable in order to force them to leave. Rent control policies can also lead to corruption, with landlords and city officials colluding to maximize profits at the expense of renters.

While national rent control policies may appear to be a solution to the affordability crisis faced by renters, they are actually a bad idea in practice. Rent control can lead to a shortage of housing units, reduce the quality of housing, be unfair to renters, have negative effects on the local economy, and be subject to abuse and corruption. In addition, there is plentiful data indicating that rent control simply does not work or achieve any of the goals that proponents suggest.

So What Should Get Done?

Instead of relying on rent control, policy makers should focus on other solutions to the affordability crisis, such as increasing funding for affordable housing development, providing financial incentives for landlords to maintain their properties, and improving transportation options to reduce the cost of living in high-rent areas. These solutions are more likely to result in real, lasting benefits for renters and landlords, while avoiding the unintended consequences associated with rent control.​

SOURCES:

  • https://www.biggerpockets.com/blog/biden-announces-renter-bill-of-rights
  • https://www.naahq.org/rent-control-policy
  • https://www.whitehouse.gov/briefing-room/statements-releases/2023/01/25/fact-sheet-biden-harris-administration-announces-new-actions-to-protect-renters-and-promote-rental-affordability/
  • https://www.brookings.edu/research/what-does-economic-evidence-tell-us-about-the-effects-of-rent-control/
  • https://www.gsb.stanford.edu/faculty-research/publications/effects-rent-control-expansion-tenants-landlords-inequality-evidence

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