A recent package of stories from The Columbian demonstrates the difficulty in creating affordable housing and preventing people from being priced out of the market.
While the issue is complex and valid arguments can be made from differing perspectives, the most equitable, effective approach remains the most simple — an increase in the housing supply. Other strategies for reducing and preventing homelessness are mostly stopgap measures that might have temporary benefits but will introduce unforeseen consequences.
Consider the topic of quickly increasing rental rates and the prospect of rent control, which was considered by the Legislature this year before being rejected.
“Many renters testified,” local advocate Sharon Pevey told Columbian reporter Mia Ryder-Marks. “Landowners and builders stormed the legislative hearings, claiming that building was the only way. But apartment living is not stable living. It only prolongs homelessness. My take on housing is to keep people in the homes they already have.”
Indeed, limiting rent increases is one way to do that. But it also is a way to skew the market, drive out local landlords and create long-term problems for affordability.
As a 2018 report from the centrist Brookings Institution surmised: “Rent control appears to help affordability in the short run for current tenants, but in the long-run decreases affordability, fuels gentrification, and creates negative externalities on the surrounding neighborhood.”
That has been the experience for many cities. For example, San Francisco instituted rent-control policies in 1979, and one study found that the supply of rental units in the city declined 15 percent from 1980 to 2016.
While price controls can provide security for renters and help keep them in place, there also can be adverse effects. As Reason, a libertarian magazine, wrote this year: “A new study from researchers at Northwestern University found that landlords were incentivized by rising rents to replace existing tenants with new market-rate-paying tenants.” Claims of wrongful evictions have increased under San Francisco’s rent-control policies.
In addition, an inability to charge the going rate can lead mom-and-pop landlords to leave the market and sell their properties to corporations; the sale of a local business to a conglomerate that is based elsewhere diminishes our local economy. There also is incentive to convert properties into condominiums, which reduces housing supply for renters.
Michele Thomas of the Washington Low Income Housing Alliance disputes these claims: “I think it’s important to not believe the mainstream talking points that always say that rent stabilization will lead to bad outcomes. Those talking points are created by the wealthy few, and it’s absolutely not true.”
Indeed, you can find conflicting studies that arrive at differing conclusions. But if a landlord owns, say, four rental units and is limited by rent-control policies that make it difficult to keep up with inflation and pay their own mortgage, it is a stretch to suggest they are the wealthy few trying to manipulate the market.
Discussions about rent control are necessary as our community and our state deal with a housing crisis. When there are more would-be renters than rental units, prices and homelessness can quickly escalate.
But limiting rent increases would be a bandage for an issue that requires a tourniquet. It would treat the symptoms when construction would address the disease.