Rent Control and Other Rent Regulation Laws Hurt Renters Seeking Housing Opportunity and Affordability
Regulations Disproportionally Benefit Higher Income Renters
As communities across the nation continue to face real housing affordability challenges, too many lawmakers are considering policies to regulate rents instead of those that will increase the supply of housing and, therefore, enhance equity and lower housing costs for residents.
A new study by Dr. Arthur C. Nelson, Professor Emeritus at the University of Arizona, provides a comprehensive review of peer reviewed academic articles which examine various rent control and other rent regulation laws across the United States and abroad. This review reaffirms that these programs reduce the supply of housing in communities resulting in, among other things, increased housing costs.
Dr. Nelson’s work reinforces an earlier 2018 paper following similar methodology by Dr. Lisa Sturtevant. Since Dr. Sturtevant’s literature review was conducted, additional research has been published that looks at the impacts of more recent rent regulation models that may not appear to be as restrictive as older rent control programs. Dr. Nelson finds that the results of these newer rent control efforts have harmful effects on renters and those seeking rental housing including:
- Disincentivizing investment in the rental community, resulting in fewer rental units;
- Inhibiting mobility, thus creating a barrier to entry for new renters seeking housing in rent-controlled communities;
- Distributing the limited benefits of rent regulation disproportionally to higher-income, older and white residents, respectively;
- Substantially reducing the value of rent-regulated properties as well as nearby unregulated rental properties, thereby reducing real estate tax revenue to the locality; and
- Failing to address, if not negatively impacting, eviction prevention, renter well-being, renter educational attainment opportunities and neighborhood quality.
“This empirical research illustrates that rent regulations not only do nothing to lower housing costs or provide housing to those most in need, but they actually hurt renters by undermining the very thing we need to address our housing affordability crisis – more housing development,” said NMHC President Sharon Wilson Géno.
“Housing is a human need, not a partisan issue. Unfortunately, some lawmakers continue to promote rent regulation in an effort to gain political popularity, instead of doing the hard work of advancing longer term, but proven solutions like zoning reform, public-private partnerships, tax abatements and other programs that will actually create the needed housing which, in turn, will make housing more affordable for all. Investing in more housing subsidy programs will support those currently struggling to pay rent while we are expanding housing supply.”
Another recent research paper by the Urban Institute, Place the Blame Where It Belongs, reiterates that there is only one answer to the housing affordability crisis, and it is building more housing. This paper further makes the point that “[s]everal factors have been blamed for [housing cost] increases, but none of them fundamentally alters the supply-demand balance . . . [t]he only solution to the supply shortage is more supply.”
These findings, coupled with the new research by Dr. Nelson, clearly show that rent control and rent regulation undermine the creation of more housing, thus actually hurting existing renters, those seeking rental housing, as well as homeowners and communities as a whole.
Find the full literature review here.
Based in Washington, D.C., the National Multifamily Housing Council (NMHC) is the leadership of the apartment industry. We bring together the prominent owners, managers and developers who help create thriving communities by providing apartment homes for 40 million Americans, contributing $3.4 trillion annually to the economy. NMHC provides a forum for insight, advocacy and action that enables both members and the communities they help build to thrive. For more information, contact NMHC at 202/974-2300, e-mail the Council at info@nmhc.org, or visit NMHC’s website at nmhc.org.
