According to PBS and the NMHC, housing affordability is a significant concern for both renters and housing providers. However, policymakers are sharply divided on how to address this issue. Now an issue under the national spotlight, rent control has become deeply divisive, predominantly across party lines.
This begs the question: What is rent control, exactly?
By Merriam-Webster’s definition, “rent control” refers to government regulation of the amounts charged for rented housing. This means that the government sets caps on the rent charged, whether by a flat maximum rent amount, capped percentage increases year-over-year, or through other regulatory schemes. In short, rent control allows the government to limit the amount of rent charged on new leases and lease renewals.
Rent control initiatives, typically enforced by local municipalities, overarchingly aim to maintain affordable housing. Ancillary aims include the government’s desire to decrease resident turnover, prevent gentrification, and otherwise curb the displacement of local residents.
However, while maintaining affordable rents for vulnerable non-property owners is ostensibly noble, the topic is controversial primarily because of its anticipated unintended consequences. According to the National Apartment Association, some of those unintended consequences include:
- Reduction in incentives to develop new rental housing.
- Investment is discouraged.
- Reduction in property taxes paid to local governments.
- Reduction in maintenance and improvement spending.
- Housing providers are pressured to sell.
- Subsidized high-income residents.
- Decreased housing options for low-income individuals and families.
Moreover, rent control disproportionately harms small landlords. Rent control does not assist renters who wish to enter the rental market; rather, it merely seeks to protect those already placed in rental housing. Finally, the unique dynamics that emerge in a rent-controlled market can inadvertently encourage residents to sublet apartments for profit illegally.
