Rent Control is Not the Answer (Just Look at SF)
Rent control is not the answer to Seattle’s housing crisis. But as housing demand outpaces housing supply, renters are bearing the resulting brunt of rent increases. Understandably, for renters who want to halt these rising costs, rent control sounds like an appealing idea.
Some politicians are seizing upon the heated emotions of tenants to build support for their political aspiration. Who wouldn’t like to have their rent stabilized?
But rent control is a pipe dream. It can’t happen anytime soon, if at all, and it runs counter to creating affordable, quality housing.
The lure of rent control is the argument that it would make housing more affordable and would prevent rent hikes. The only seeming downside would be a revenue loss for landlords, who are perceived as “1 percenters,” and for wealthy corporations. But according to the Rental Housing Association, around 87 percent of landlords own fewer than 10 units — of those landlords, the vast majority actually own four units or fewer. In other words, a blow to the small-sized landlord is a blow to Seattle’s economy.
In the long run, Seattle needs to tackle a much bigger issue: the lack of housing. It’s the root of the housing affordability problem and can be boiled down to this: when supply is limited, demand goes up and higher rents follow. With an increased supply, demand and rents decrease. Logically, the solution then is to increase housing supply.
This is where we should be expending our energy — creating affordable housing units, not chasing an unreachable dream that diminishes both housing supply and quality.
When rent is controlled, landlords pull in less income and have less incentive to maintain their units. Properties leave the housing market as they fall into disrepair and are abandoned. New development ceases as developers find more attractive investments outside the housing market or in other cities that offer a better return. Housing supply dwindles and can’t meet demand, leaving a city with a housing crisis worse than the one Seattle already has.
Consider cautionary tales like New York City and San Francisco. In New York City, any apartment seeker can attest to the nightmare of finding an apartment, much less an affordable apartment. The city has been combating its housing shortage for decades as a result of its rent regulations and has been trying to move away from rent control, deregulating more than 231,000 units in the last 30 years.
San Francisco is also combating a housing shortage. To make matters worse, rent regulations there don’t even help the intended population. The city’s last study from 2000 found that one-fourth of households in rent-controlled apartments earned more than $100,000 a year.
With Seattle’s fast-growing population and housing demand igniting the debate around housing affordability, proponents of rent control are pressing the City Council to take a stance on the issue. The real power, though, lies with the state Legislature.
Washington banned rent regulation in 1981. By law, cities cannot enact rent-control legislation. So, even if Seattle were in favor of the measure, the state Legislature would have to come on board.
That is a high hurdle — one that won’t be cleared.
Since moving the needle in the Legislature requires a great deal of effort, the common-sense approach is to prioritize the issues on the state legislative agenda that have both a good chance of passing in the Legislature and working in the real world.
Regardless of whether rent control is good policy (it’s not), we shouldn’t spin our wheels in the Legislature when we have several other tasks and requests that have greater momentum and higher priorities.
In any case, let’s learn from other cities that have done the legwork for us. Rent control not only fails to address the housing affordability crisis, it exacerbates the issue in the long term.