Rent Control: A Bad Idea That Keeps Coming Back
Written by Luis Miguel
The curious thing about bad ideas is how they never seem to die. No matter how many times an idea has failed in the past, there’s always someone, somewhere willing to give it another try.
Is it any surprise, then, that American socialists, who stubbornly refuse to learn the lessons of their ideology’s astronomic body count and penchant for throwing once-thriving economies down the drain, are attempting to resurrect the nearly universally discredited doctrine of rent control from the catacombs of good-intentions-gone-wrong?
The Rent-control Revival
Representative Alexandria Ocasio-Cortez (D-N.Y.), the democratic socialist whose support for ambitious big-government programs such as the Green New Deal and Medicare for All has made her a darling among the Democrats’ rising progressive wing, is once again moving the needle for her party leftward with a sweeping anti-poverty legislative suite.
The package, which Ocasio-Cortez has entitled “A Just Society: A Place to Prosper Act 2019,” is comprised of six bills: the Recognizing Poverty Act, the Place to Prosper Act, the Mercy in Re-Entry Act, the Embrace Act, the Uplift Our Workers Act, and legislation to ratify the UN Covenant on Economic, Social and Cultural Rights.
Some of the changes Americans could expect if Ocasio-Cortez’ Just Society becomes law include, according to her, a prohibition on landlords “discriminating” against potential tenants based on source of income, making it easy for those using housing vouchers to rent anywhere; billions of dollars a year for education and outreach concerning the dangers of lead-based paint; and, of course, nationwide rent control.
The legislation includes an annual rent increase cap of three percent, a limit that goes further than even the nation’s most progressive states. Oregon caps rent increases at seven percent after inflation. A California bill signed into law in October puts the limit at five percent plus inflation.
Speaking to the progressive news organ-ization NowThis about her new program, Ocasio-Cortez said,
“A just society treats housing as a right, not a privilege.”
While A Just Society is unlikely to gain serious traction in Congress while Republicans maintain their hold on the Senate, its central premise that housing is a “right” that must be guaranteed to every person by the government (and paid for by taxpayers) is already finding expression in state legislatures around the country.
Oregon: In February, Oregon became the first state in the union to pass statewide rent control. The vote in favor was largely along party lines, with Democrats citing rising rents and the falling availability of affordable housing as grounds to crack down on landlords.
In addition to the seven-percent rent cap, the measure places additional limits on landlords’ ability to evict tenants, requiring them to provide a month of paid rent in some circumstances.
California: The Golden State followed in Oregon’s footsteps in September, outdoing its neighbor with a five-percent rent increase cap and provisions that landlords may only evict tenants if they have “just cause,” such as failing to pay rent or damaging the property.
The Tenant Protection Act marks a comeback for the California rent-control movement, which encountered a setback after its failure to convince the state’s voters to say “yes” to Proposition 10 last November.
Prop 10 would have repealed the 1995 Costa-Hawkins Act, a law that protects the right of landlords to raise rent to market rates after tenants move out while also banning municipalities from applying their local rent-control policies to single-family rentals or to units built before 1995.
Rather than kill the movement, Prop 10’s defeat at the polls galvanized tenant leaders and organizers, culminating in the landmark legislation authored by State Senator David Chiu, a San Francisco Democrat.
“The housing crisis is reaching every corner of America, where you’re seeing high home prices, high rents, evictions and homelessness that we’re all struggling to grapple with,” Chiu said. “Protecting tenants is a critical and obvious component of any strategy to address this.”
Chiu is correct that his state is in dire straits. California has the highest housing prices in the nation. And in Chiu’s hometown of San Francisco, which has long been known for having some of America’s strictest rent-control policies, the homeless population has grown by 17 percent since 2017.
California as a whole accounts for roughly half of the country’s unsheltered homeless population. And after adjusting for housing costs, it has the highest state poverty rate: 18.2 percent — five points above the national average.
State politicians have attempted to address the issue with several multibillion-dollar programs for shelters and subsidized housing, without success.
So now it seems the question progressive legislators are asking themselves is, “Why not make the housing subsidies easier by bringing the rents down first?”
With Oregon and California setting the stage, that’s a question that progressive lawmakers in every state will increasingly ask themselves.
Rent Control: Coming to a City Near You
In fact, rent-control proposals have arisen as legislation or ballot initiatives in about a dozen states since 2017, including in Washington, Colorado, and Nevada.
New York passed a housing stability and tenant bill last summer that, while not as far-reaching as California’s or Oregon’s, further restricts the conditions under which landlords may raise rents and lowered the cap for Major Capital Improvements. Major capital improvements are classified as improvements, typically involving replacements or upgrades, that benefit all tenants of a building (new roof, new boiler, etc.). Major capital improvements often justify rent increases. Formerly, the maximum amount rent could be increased in rent-stabilized apartments after a major capital improvement was six percent in New York City and 15 percent elsewhere in the state. Now that has dropped to two percent in New York City and everywhere else.
This article appears in the December 9, 2019, issue of The New American. To download the issue and continue reading this story, or to subscribe, click here.
Courtesy of The New American