The folly of rent control continued

By Rea S. Hederman Jr. 
The Buckeye Institute

Polls show housing costs are a major concern for renters and homeowners across the country. Government regulations, zoning requirements, parking lot minimums, and many other bureaucratic restrictions that make it harder and more expensive to build new homes and apartments inevitably reduce the supply of available housing. And the government rules that artificially limit the housing supply make housing less affordable.

The Biden-Harris administration’s two-pronged strategy to “fix” these government-made problems with government-mandated rent control and a lawsuit targeting a real-estate data company will only make them worse.

Rent controls cap what landlords may legally charge in rent, which reduces the incentive to build new or improve existing rental properties. Those reduced incentives lead to poorly maintained and less available rental housing, artificially raising rent and prices for non-rent-controlled housing. 

Academic studies have shown that all over the world, wherever rent controls have been tried, they have “amplifie[d] the shortage of housing” and exacerbated rental housing conditions as landlords predictably forego maintenance and improvements. By contrast, cities that have allowed and encouraged housing supply to grow to meet rising demand, have seen rents stabilize and even decline.

Not content to wait for Congress to implement the misguided Biden-Harris rent controls, the U.S. Department of Justice has accused the RealPage software company of helping large landlords to fix prices like a cartel. 

Eight state attorneys general have joined the federal lawsuit, but Ohio’s Attorney General Dave Yost is wisely not among them. Touted as a bipartisan effort, only one Republican – the attorney general of Tennessee – has signed on to the case, which, as The Wall Street Journal notes, is yet another example of how “politicians blame businesses rather than fix their own misguided policies.”

Rent control policies have been unmitigated failures wherever and whenever adopted. Instead of making housing more affordable, they reduce housing supply, making it harder to find habitable homes, and driving up housing prices for everyone not lucky enough to already live in a rent-controlled apartment. But with the November election just two months away, so the Biden-Harris team cares more about soundbites than sound policies.

Rea S. Hederman Jr. is the vice president of policy at The Buckeye Institute.