After aerial bombings, the fastest way to destroy housing is through rent control. Yet that is what would happen if 50 congressional Democrats got their wish. In a recent letter to President Biden, they urged him “to pursue all possible strategies to end corporate price escalation in the real estate sector and to ensure that renters and homeless people across the country are stably housed this winter”.
Although they didn’t use the words “rent control,” that’s the essence of what they’re asking for: federal rent control.
California representatives signing the letter included Representative Katie Porter of Orange County, currently a candidate for the US Senate, who has a knack for supporting the worst legislation; Nanette Barragán of the South Bay; Judy Chu of the San Gabriel Valley; Silicon Valley’s Ro Khanna; Barbara Lee of Oakland, who is also expected to run for the Senate; and Mark Takano of Riverside.
California already has rent control through Assembly Bill 1482, the California Tenant Protection Act of 2019. It caps annual rent increases at no more than 5%, plus the increase in the rate of inflation local (the consumer price index), with a maximum of 10%.
Jurisdictions like Los Angeles and San Francisco have long had rent control policies on the books. Do either city seem affordable to you? And as everyone has probably noticed, there are a lot of old apartment buildings in these towns. This is not just an aesthetic decision on the part of cities. This reflects the fact that rent control policies are another constraint to housing production. Basic economy.
If House Democrats really want to help renters, they should stop supporting inflationary spending. Last year’s $1.7 trillion spending bill was a key driver of the ongoing inflation rate of around 8%, a tax on the poor and middle class. In return, the Federal Reserve fights inflation by raising interest rates, which discourages housing construction.
If California’s Democratic congressional delegation wants to help renters, its members should suggest helpful ideas like reforming the California Environmental Quality Act and reducing mandates on housing construction to their Sacramento counterparts. It would help many more tenants over time than rent control.