Thanks to a recent article from the Washington Post we know that most economists agree that rent control is indeed bad for the economy because it doesn’t solve the supply vs. demand issue that we have in California and the United States today.
Rent control bills like the defeated Proposition 10, or AB 1482, California’s “anti-gouging” bill, are perfect examples of legislation gone wrong because although rent control sounds good in theory, it’s not going to get more housing built quickly.
Supply Vs. Demand Problem
As long as there’s no new construction, controlling that natural increase is just a game of musical chairs. You can change which people get to live in a city, but you still leave just as many people out in the cold. Actually, a few more, because rent control also reduces the incentive to supply rental housing.
All this suggests an actual solution to skyrocketing rents: Build more housing, so that the rent controls won’t be necessary, and offer subsidies to the smaller number of low-income people who simply can’t afford decent housing. To do that, cities would need to ease the costly land-use regulations that make it so difficult for developers to fill the unmet demand. And in many cases, cities would also need to get rid of rent control, both to reassure potential landlords that they can build without fear of new controls and to encourage landlords to tear down smaller buildings and put up bigger ones, something that rent protections often prevent.
What Comes Next for California?
With AB 1482 advancing to the State Senate now is the time for every owner of rental properties in California to contact their elected representative to voice their opposition for AB 1482.
If you don’t know who your elected representative is in California CLICK HERE to find who is the elected representative for your city.
Contact 36 North Property Management
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