Rent Control Looms Large
Earlier this month, National Apartment Association (NAA) Senior Vice President of Government Affairs Greg Brown sat down with Tanya Sterling of GlobeSt for a discussion on the presence – and passage – of rent control policies throughout the country. The following is a digest of their discussion; the original article is available for complete coverage.
As Americans increasingly choose to call apartments home, questions surrounding our nation’s complex housing affordability crisis are expected to dominate discussions at every level of government. Too often, however, lawmakers default to rent control policies as the one-size-fits-all solution to their locality or state’s housing crunch.
Unfortunately, these failed policies do nothing to alleviate the forces driving increased rents and have never proven to be viable long-term solutions. Rent control makes an appealing soundbite but fails to acknowledge the simple fact that housing costs are driven by supply and demand – these policies increase demand but do nothing to expand supply, a fundamental flaw that ultimately hurts apartment residents and the industry. In fact, with the long-term profit potential of apartment homes restricted by rent control, building new stock becomes less attractive and developers may choose to leave highly impacted markets entirely.
NAA can say it unequivocally opposes rent control, but these policies continue to appear throughout the nation. Oregon’s passage of a rent control measure earlier this year, alongside the California legislature’s recent approval of statewide rent control, will almost certainly embolden forces elsewhere to pursue similar laws – while California’s legislation may not be a surprise, the call for rent control is appearing in unexpected states and localities.
Despite the wave of rent control policies, there is an opportunity to educate lawmakers and citizens alike. With apartment demand growing, it is obvious that the market is falling short of needed supply to keep up – the nation needs to build 328,000 apartments annually just to meet current demand. Limiting the influx of new housing is an unintended, yet costly, consequence of rent control policies. Rent control is detrimental to the long-term health of communities, and we must prepare to tackle this complex issue with more than a rent control Band-Aid.
Over 30 years of research, the industry has witnessed rent control policies continuously fail to provide relief. Hear more about viable solutions to America’s affordability crisis at the GlobeSt. APARTMENTS conference October 29-30, where Brown and Robert Pinnegar, NAA President and CEO, will further discuss viable solutions to America’s affordability crisis.