The Resurgence of Rent Control

In recent years, voters and politicians have increasingly embraced rent control in response to rising housing costs. The resurgence of rent control is an example of democracy in action.

Democracy means unlimited majority rule, that the majority may do as it pleases simply because it is the majority. If some individuals are acting in a manner that the majority doesn’t like, the majority may force those individuals to act as the majority deems appropriate. This is precisely what is occurring with the resurgence of rent control.

Many tenants and politicians believe that some landlords are raising rents “too much.” So, they make it illegal to raise rents more than the activists and politicians think appropriate. Such laws provide renters with some temporary relief; however, like all price controls, rent control is harmful in the long-term.

The average voter has an understanding of economics that doesn’t extend much beyond the balance in his bank account. He has little understanding of such concepts as supply and demand, restrictions on production, land-use regulations, or price controls. To understand such concepts, one must look beyond the direct and easily identified consequences. One must look at the big picture—the full context. This includes looking at the long-term consequences.

The long-term consequences of rent control have long been demonstrated to be destructive to both the quality and the quantity of rental housing. Despite this overwhelming evidence, advocates of rent control believe that somehow it will be different in their city. Unable to think in principles, they believe that just because rent control has been harmful in New York City, San Francisco, and everywhere else it’s been tried doesn’t mean that it will be harmful in St. Paul, Kingston, or any other city.

It is certainly understandable that renters aren’t happy about the rapidly increasing cost of housing. But the solution isn’t more restrictions on housing producers. The solution is to repeal the barriers to producing housing. For that to occur, we need a new framework for considering housing policies.