Rent Control is Not a Solution To Housing Unaffordability

  • Rent regulation—both rent control and rent stabilization measures—shrinks the overall supply of housing. A 2019 study of rent control in San Francisco found that it led to a 15% reduction in rental housing and a 25% reduction in the number of renters living in rent-controlled units.
  • Rent regulation hampers the construction of new rental units, even if new construction is explicitly exempted by the regulations.
  • Faced with the financial strain from reduced revenue, owners may be unable to maintain and repair existing rental units. For example, rent-controlled buildings in Cambridge, Massachusetts were deteriorated and “in worse condition” than non-controlled buildings.

Rent Regulations Punish Many Stakeholders: Women, Homeowners, Neighborhoods, and Local Governments

  • Rent regulation limits profit for property owners. If the costs of renting out a property exceed the income earned, then property owners have no incentive to rent–leading to fewer rental units. 
  • Rent regulations undermine financial security and generational wealth-building among women. Some 44% of property owners who rent to tenants are women, and 31% are people of color. 
  • Rent-controlled properties can lower the value of neighborhoods by making them less desirable. Non-rent-controlled properties pay the price of depreciated values.
  • Local governments stand to lose tax revenue from declining property values among rent-controlled properties. In addition, municipalities face significant new administrative costs as they create new bureaucracies to manage rent-controlled units.

Less Government Intervention Leads to Better Housing Solutions

  • The best solution to housing unaffordability is to expand the number of available dwellings. By reforming or eliminating land-use regulations and other zoning restrictions, municipalities can encourage new construction or expand rental units in current living spaces.
  • Local jurisdictions could allow for the construction of multiple-unit dwellings to be built or expanded on single-family lots. Not only do they “gently” expand the housing supply in residential neighborhoods, but property owners, who may be older, enjoy added rental income to supplement their budgets.
  • If abolishing rent regulations is not possible, jurisdictions should at least include means-testing to ensure that only the truly needy stay in those units. Income eligibility is the only way to ensure that higher-earning residents (like Afghan princesses) don’t occupy rent-controlled units indefinitely while poor residents wait endlessly for a few available spots.

Click HERE to read the policy focus and learn more about how rent control affects you.