The movement for rent control is back.
In response to steep rent increases, Richmond, Santa Rosa, San Jose, and Stockton are among California cities considering the enactment of rent control and just cause eviction laws (Richmond’s measure has already passed). Seattle activists are also pushing for rent control, with over 1000 people turning out for a rent control debate on July 20.
While restricting rents and evictions are essential to reduce tenant displacement, the real estate industry has a different agenda. And the push to prevent landlords from raising rents 200% or more has triggered a predictable response from real estate interests profiting from unlimited rent hikes.
I’ve been part of rent control wars since the 1970’s. Here’s what I know for sure: rent control opponents rarely argue that their desire to maximize profits is the basis for their opposition.
Such arguments won’t play well with the public. Instead, those opposed to rent control feel compelled to cloak their opposition as being driven by their concern for tenants. Why tenants are better off facing unlimited rent hikes and eviction without cause may seem unlikely, but the real estate industry insists that concern for what’s best for tenants leads them to oppose rent control.
This condescending and elitist ” we know what’s best for our tenants” attitude tops the list of rent control lies. Here are the top five others:
Rent Control Reduces Repairs
Opponents routinely claim that rent control prevents landlords from making necessary repairs. In the 1970’s and 80’s, it was common to link rent control to the rundown conditions of New York City’s South Bronx. Anti rent control mailers in Berkeley and other California cities had splashy photos of South Bronx buildings on fire and of piles of trash on the street.
That city and state housing codes mandate standards for housing conditions never stops anti-rent control zealots from raising this argument. It was frequently heard in the recent debate in Richmond.
Rent Control Raises Rents
If rent control actually raised rents, the real estate industry would be all for it. But the argument here is based on the correct claim that cities with the highest rents—such as New York City, San Francisco, and Los Angeles—all have rent control.
It should be obvious that only cities with high rents and steep rent hikes are driven to pass rent control. It’s not needed in the many parts of the country where working people can afford to buy a home and where affordable rental housing is widely available.
Economists Oppose Rent Control
The “lie” here is not that the vast majority of economists oppose rent control; they do. Most of this overwhelming white male and Republican group also opposes minimum wage hikes and other government regulation of business going back to the New Deal. They also love free trade deals.
Rent control opponents often cite NY Times columnist Paul Krugman’s writing against rent control. This was during a time when he also zealously backed NAFTA and globalization-producing sweatshops, which he now realizes were terrible mistakes.
The “lie” here is the claim that cities should turn social policy over to economists, who are not politically or demographically reflective of urban America. Most economists have never met a tax break for the rich they couldn’t support, and their preference for theory over facts is why Krugman describes many as “zombies” for their ongoing resurrection of elite-favoring financial policies that should be left for dead.
Rent Control Costs Too Much
Since rent control and just cause eviction laws require a Rent Board to administer, opponents claim it costs too much to implement. They are often joined in this argument by anti-rent control city administrators. For example, city staff in Richmond initially claimed that eleven fulltime staff were needed for the city’s Rent Board ( ignoring actual Rent Board costs in similar cities like East Palo Alto).
Rent Board’s are primarily funded by a fee on rental units covered by the law, not by general taxpayers. Considering how cities lack other funding sources for subsidized housing, enacting rent control is far and away the most cost effective affordable housing strategy.
Rent Control Hurts “Mom and Pop” Landlords
Concern with “mom and pop” landlords led San Francisco to exempt owner-occupied buildings of four units or less from rent control from 1979 through 1994. Voters passed an initiative ending the exemption in November 1994.
The phrase “mom and pop” landlords harkens back to a bygone era when rental housing in San Francisco was relatively cheap. Today, rent increases on vacant units in small buildings usually exceed those of larger structures, as these units are more attractive to affluent renters.
Real estate interests always claim they speak for “Mom and Pop” interests. In the 2014 Ellis Act reform fight, when a legislator claimed that the bill requiring a five year holding period before invoking Ellis would hurt small landlords, the bill was amended to address that concern; the legislator and their colleagues calling for the change then voted against the revised bill.
Rent Control Stops New Construction
This argument is consistently used despite newly constructed buildings being exempted from local rent controls by state law. The argument not only lacks any factual basis, but it essentially argues that rental property investment will dry up under rent control; a claim that San Francisco, Santa Monica and every other rent control jurisdiction refutes.
Rising rents have put the anti-rent control forces on the defensive for the first time since the 1980’s. Tenant supporters should back groups like Tenants Together, SEIU Local 1021, and ACCE as they seek to expand rent control and just cause eviction laws to other cities.