There are two underlying political motivations for rent regulation: the first is a genuine, however misguided, attempt to preserve affordable rental housing opportunities; the other is an egregious attempt to stop affordable rental housing – a growth control tool.
Before I lambast those who use it to control growth, I must acknowledge those who are legitimately concerned about affordable housing – desperate, in fact. Often, they have inherited a situation they are now tasked with fixing. Problem is there are no quick-fix, silver-bullet solutions – only hard choices. They know that involves building more housing to give their constituents choice and keep prices in balance through healthy competition. They know this, but that is a long-term goal that does nothing for them today. So, despite their best judgement, they consider some form of rent regulation for the optic of looking like they are doing something. I get it. It's irresponsible, but I get it.
Then there is the use of rent regulation as a surrogate for growth control; specifically, apartment growth control. They know by regulating it to dissuade the development of it. Good politics is like water: it follows the path of least resistance. They know that developers and investors of apartments will just go elsewhere.
I am sympathetic enough to believe that many do not personally espouse this philosophy, but community opposition to high-density development may put them in a political box. In either case, they are savvy enough to know that openly having a no-growth policy is insensitive and untenable to the people living in an area with scarce and expensive housing. Yet in the most ironic and cruelest political machinations: the no-growth lobby can be on the same side as the pro-affordable housing advocate on the issue of rent regulation, but for far different reasons.
One supports the policy in the hopes that it will defy its history and preserve affordable housing. The other supports the policy because it knows that it will continue its long history of pushing housing elsewhere and make what remains more expensive.
That policy paradox is what makes rent regulations so bad. The idea that a policy can be disguised as something sympathetic to the community's needs, yet in practice, hurt the community. This is probably what prompted no fewer than 34 states to preempt rent regulation at the municipal level. To prevent pitting cities against other cities in a game of "kick the can of my growth responsibilities to you."
This in part explains why, despite rent regulation being a colossal failure, incredulously, it still has its ardent proponents. It is only through a closer examination that we uncover its nefarious policy use. For the no-growth politician, the use of rent regulation to control growth looks like the greatest win-win scenario ever. It is like losing weight while eating whatever you want and not exercising.
Just so you know, that never happens. Despite all those late-night infomercials saying you can lose 20 pounds in a week by taking this pill, eating this grass or dedicating 10 minutes a day to so-and-so machine, it doesn't happen.
Not to be gross, but using rent regulation to control growth is like using tape worms to control your weight. While it may be a wildly successful tactic, it is a poor strategy because of its unintended consequences. What the nefarious proponents fail to understand is that while it successfully drives rental housing elsewhere, it does not control growth and ultimately hurts their pocketbook.
You see, limiting growth encourages more people to live in the same number of units. People live where they live out of convenience. Affordability is just a compromise that they make. That's when you see doubling and tripling of occupancy in units. That is more people living in fewer units creating additional community impacts without the benefit of additional property tax to pay for it. Where does the additional tax revenue to service a larger population come from when you limit rental housing? Property tax on single-family homes and businesses. Ouch.
Everybody pays for rent regulation policies, whether you chose to acknowledge it or not.
As always, let me know what you think.
By Fred Tayco, Director of Government Affairs, NAA