

Rent Control: Is It Truly Beneficial? Many Americans will live in a city at some point in their lives; so rent control and the housing economy in urban settings is something we all should be concerned about. Rent control has been in place in major cities across the country for centuries, six of the largest fifty cities in the country have rent control policies (Murphy). However, our housing markets always seem to be stagnant and struggling due to lack of housing, increased rent prices, and lower levels of housing turnover. There are several questions behind rent control-who it really benefits, and all of the tolls it really takes on a city's economy. Rent control is supposed to help lower class citizens; yet, it is often abused to help the wealthy by capping their extravagant apartments in prominent areas. Although capping rent is meant to help lower class citizens by limiting how much they pay, it therefore limits how much income a landlord makes. With a cap on their income, landlords stop taking care of their apartments and lose respect for their tenants. This is due to the fact that they know their rent-controlled housing will be in constant demand regardless of the quality of housing and treatment of their tenants.  People will always desire housing whose price will never rise. This system may have benefited people in the past, but it does not seem to be creating the same benefits in our modern economies. Many feel that the cap on rent helps those less fortunate, and in some ways it does. However, the quality of rent-controlled housing has diminished, as well as relationship between landlord and tenant. It also tends to benefit those who need the help the least, the wealthy. Rent control is not providing benefits that create a strong economy, it is an outdated idea for our economy today, and we need to create a solution to provide housing for those less fortunate while ending this. 

Rent control is the government regulation of the amounts charged for rented housing. The government is able to set a price cap on the maximum price an apartment can be rented out for, in an effort to keep housing affordable for its citizens. (Murphy) Robert Murphy, an economics professor at Texas Tech University, explains how rent control functions, "For the law to have any teeth  --  and for the politicians who passed it to curry favor with the public  --  the maximum rent-controlled price will be significantly lower than the free-market price" (Murphy). So even as our economy fluctuates, as it often does, the price of a rent controlled apartment must legally remain the same. Sure, theoretically this is a great idea, but unfortunately in practice it often does not play out as smoothly.  Many have come to realize that rent control is not the solution to affordable lower class housing, "93 percent of American economists feel that our economy would benefit the most if rent regulation was eradicated" (Murphy). If 93 percent of economists believe that this is not an optimal solution for our country, then why has the government kept in action? Why haven't changes been made? Unfortunately, many people in this country are unaware of the negative effects this policy has on most everyone involved in the housing economy. 

               In the United States, rent control began through the efforts of local "rent anti-profiteering committees and public pressure." (Willis)  Between 1919 and 1924, several states and cities promoted rent and eviction control laws. Many of these were put in place to help re-stimulate the economy after the World Wars. (Willis) These laws had different restraints and purposes than those of our modern rent control laws. Newer laws were enacted in 1971 as part of Richard Nixon's wage and price control movement. 1971 was 46 years ago, and the laws behind rent control have undergone minimal changes to better fit our ever-changing economy. (Willis) Most economists agree that our modern day economy has outgrown rent control restrictions, and they believe these laws cannot be reformed and should be cut out of cities completely. (Murphy)

The most obvious problem is that rent control immediately leads to a shortage of apartments, meaning that there are potential tenants who would love to move into a new place at the going (rent-controlled) rate, but they can't find any vacancies. It is such a struggle to find housing in major cities because tenants never leave their apartments due to their desire to stay with a capped rent place. People then stay in their homes for the rent benefits, where if there were no benefit, they would leave and find housing more suitable to them as their life changes. It even gets to the point where people pass their housing on to next-of-kin after they have died. "When a tenant in a rent-stabilized or rent-controlled apartment dies or moves, certain family members (including nontraditional family members who are not necessarily related) who have been living in the apartment have the right, under certain conditions, to take over the tenancy." (Willis) The government's interference prevents the economy from creating its own equilibrium, which means a skewed supply and demand level, "By forcing rents below the market price, rent control reduces the profitability of rental housing, directing investment capital our of the rental market and into other more profitable markets" (Blackwell). Rent control also limits the amount of new housing constructed in these cities. So not only does rent control create a housing shortage within preexisting housing, it also limits the amount of new housing being built. Prior to rent stabilization in 1969, New York City built 35,000 new homes a year on average. By the early seventies, that rate decreased to 20,000 a year, and by the eighties, down to 10,000 (Beyer). That means that over 25,000 new dwellings per year were no longer built in New York City -- imagine how many homes we would have today and how that could affect our shortage right now. 

Lack of housing turnover can also lead to issues between landlords and their tenants. They know that their tenants will stay regardless of the quality of the apartments and quality of treatment they receive. Tenants in rent-controlled apartments have suffered abuse from their landlords in many ways. In most cases, the tenants do not provide the upkeep that the apartments need, partially due to the fact that they are not receiving the amount of revenue they need to take proper care of the apartments, "providers faced with declining revenues may be forced to substantially reduce maintenance and repair of existing housing" (Blackwell). So, yes, one is paying less for their apartment, but the quality of said apartment is subpar because the rent they are paying cannot cover the maintenance that their apartment needs. This begs the question, what is more valuable --  a less expensive, deteriorating apartment or a market price, properly maintained apartment. Landlords have also been known to trick their tenants into moving out by feeding them lies and pressuring them with legal threats. One New York City couple recorded their encounters with their landlord, who told them the police were going to be searching the building, and urged them to move out, "It's going to be a nightmare," the landlord explained (Navarro). After recording the countless pressuring discussions, the tenants took their recordings to court. "The quality [of the recording] was still good enough to have already won the residents an order for the landlord to halt construction work ...  and to stop contacting tenants about leaving their homes, as the case heads for trial or a settlement." (Navarro) Fortunately for these tenants, they were able to fight against their landlords and receive the proper care they deserved, but most times this abuse goes unpunished. 

Business Insider's Jim Edwards puts it simply, "Rent control doesn't work. It doesn't help the poor. It helps the rich. (Or at least, the not-poor)" (Edwards). It has become a "who do you know" game when finding an apartment in cities like New York and San Francisco. If you know the right people, you snag a great deal on a luxurious apartment with a ridiculously low, rent-stabilized rate. Edwards recalls how excited a colleague of his was when he obtained a rent-controlled apartment in a rather elite area of New York City, all because he knew the right people. Does an author for the New Yorker and other popular magazines really need to pay hundreds of dollars less than the market rate for his apartment? Edwards, and many others, think not. Rent control is saving those who don't need the financial help. It is saving these people more than it is saving the lower class. This is not the original objective behind rent regulation, and perhaps it is time to realize that it does not benefit those that it should. 

Rent control has actually been the theme of episodes of some popular television shows such as Sex and the City and How I Met Your Mother. In each of these shows the main characters live in rather nice apartments in the New York City/Brooklyn area, and they often brag about how wonderful it is to have such a lovely apartment for a regulated price. In Sex and the City, the characters live way beyond their means and are able to do so while continuing to live in chic apartments that they are only able to afford thanks to rent control. While Carrie Bradshaw spends 40,000 dollars on shoes over the course of the series, she still is able to rent a beautiful apartment in West Village that is rent controlled. She clearly needs that help, right? And on How I Met Your Mother, Ted and Robyn, an architect and a reporter (definitely lower class citizens in need of help with their rent, right?), argue over who gets to live in a beautiful, rent-controlled apartment on the Upper West Side. These pop culture examples should open our eyes to how rent control in practice mostly benefits those who don't truly need the help. 

In August of 2015, Richmond, California became the first city in thirty years in the state of California to pass a rent control law, which "would have prevented landlords from increasing rents by more than 2 percent each year and made it more difficult to evict tenants" (Ioffee). This issue was hotly debated  by tenants' rights advocates worried about eviction and their adversaries who felt this referendum would curtail property owner's rights and lessen their ability to afford improvements. The ordinance lasted for a mere few months before it was repealed (Ioffee). However, the outcome must be indicative of something -- are people finally starting to realize that perhaps rent control is not the best way to help lower income tenants afford housing? Do property owners deserve the same rights too? 

If New York City abolished rent regulations today, it would double the number of available market-rate units, meaning housing costs would be shared more equitably across the population (Beyer). Needless to say, abolishing rent control would make it easier for landlords to improve the quality of their housing, which would benefit tenants as well. By ending rent control we won't be throwing people out on the street. It absolutely will be an economic adjustment, and certainly cannot be done overnight, but over time we can wean ourselves off of rent regulation.  By giving out housing vouchers to those who desperately need it, providing government-run senior living, and having government run housing projects, we can provide those struggling with housing. We could emulate London's idea in which developers can build luxury apartments so long as they agree to set aside a certain amount to be sold under the market rate (Edwards) This way we would have a smaller rent controlled market for those who truly need to pay below the market price, and this benefits developers by allowing them to make a larger profit on their developments. Even that would be an improvement, not ideal, but an improvement nonetheless. By cutting rent control, developers can go back to producing more housing which will increase the supply and hopefully lower the market rate for rent. These cities that still have rent regulation are some of the most expensive places to live in our nation. By removing rent control we will be able to lower market prices and make it more affordable for everyone to find housing. It wouldn't be an easy transition, but it is a transition that is necessary.

As a Forbes writer Scott Beyer says, "Bad ideas die hard, and rent control is no exception." In New York City, legislation has been proposed to change the way it handles rent control, but nothing has been set in stone, and the typical rent control rates remain the same. For a process that is supposed to help a city's economy, evidence proves that it brings more harm than good. Each city should have the right to determine how they want to handle rent-regulation, but hopefully in the near future they will come to find alternative solutions that will help stimulate the economy instead of hinder it. 

