Washington Business Journal: Housing rent control policies equate to real estate insanity
Viewpoint: Housing rent control policies equate to real estate insanity
Albert Einstein famously said that the definition of insanity is doing the same thing over and over expecting different results.
Already in 2023, rent stabilization policies have been brought for consideration in both the Maryland and Virginia statehouses, as well as in Montgomery and Prince George’s counties. This speaks of a broad-scale failure to learn from the mistakes of other jurisdictions that have waded into these troubled waters. Everywhere rent control has been tried, it has proven to be an abysmal failure, producing a well-documented record of stifling housing supply, forcing properties into a state of disrepair and, most importantly, failing to keep rents low in the long run.
The Metropolitan Washington Council of Governments reports that the region needs to build around 32,000 new apartment homes each year just to keep pace with demand. Adoption of rent controls will set us back.
For real-world proof of this dynamic, one need only look to St. Paul, Minnesota, where voters approved a ballot measure to implement rent control that resulted in building permits declining by as much as 80% in the months that followed. This ultimately drives up the cost of housing by forcing a growing community to compete for a dwindling supply of housing units. A major housing supply deficit coupled with stagnating wages failing to keep up with costs of living are the underlying causes of the nationwide housing crisis. Rent control does not solve these problems.
Rent control also poses great challenges to existing units, which struggle to cover rapidly rising operating expenses and secure costly financing for major capital improvements. Deferred maintenance and lack of investment in capital improvements reduces the quality of housing over time. This has played out over and over across the country. Declining property conditions also lead to decreased property values, resulting in lower tax revenues and therefore less funding for community schools, safety and social services.
There is a better solution. Increase funding for rental assistance.
According to the Center on Budget and Policy Priorities, housing vouchers “sharply reduce homelessness, housing instability and overcrowding,” and are “closely linked to educational, developmental and health benefits that can improve children’s long-term life chances and reduce costs in other public programs.”
The problem with the housing choice voucher program is lack of funding.
The research on the long-term outcomes of implementing rent control versus increasing funding for rental assistance is clear and compelling.
Stop the insanity. Make the smart decision to prioritize housing and invest in our communities; reject rent control and increase funding for rental housing assistance.
Margaret “Peggy” Jeffers is executive vice president of the Apartment and Office Building Association of Metropolitan Washington.