As policy makers grapple with housing supply and affordability issues, one sector is receiving extra attention: rental housing. The federal Emergency Rental Assistance Program funds are exhausted in most areas, and inflation is making it difficult for many Americans to pay their bills. Without enough starter homes available for new homebuyers to purchase and with a shortage of low-income rental housing options, policymakers are considering how best to address these issues. Unfortunately, they are not always looking at the larger picture when they do.
At the state and local level, rent control policies are being increasingly touted as a solution. These measures typically limit the amount a property owner can raise the rent on a unit while a resident is in it.
Because these measures, like most rental-housing issues, are taken up at the state or local level, the country ends up with a patchwork of regulations. There are areas in which rent control has been in place to some degree for generations. In other areas, individual localities are considering enacting it. And in some states, preemption laws require statewide approval of the policies, barring localities from taking them up on their own.
The federal government’s role in rental housing policy is limited—but it still has influence. The Supreme Court’s decision striking down the CDC’s eviction moratorium in 2021 was an important reminder that, even during an emergency, the federal government can’t insert itself into policy areas it doesn’t have power in. However, the White House and the federal agencies do have some power, especially over federally backed housing. The White House also has its “bully pulpit,” from which it can urge states to enact policies that it cannot. Over the last year, the White House held multiple meetings with housing provider and tenant groups discussing rental housing issues. The National Association of REALTORS® was invited to participate. In these meetings, NAR stressed the need to address the root of affordability issues by generating more housing and encouraging investment in affordable housing—not rent control or other policies that interfere with the ability of housing providers to run their businesses.
Rent control is a rare instance where the research is fairly conclusive: It doesn’t work. These measures not only fail to improve the financial situation of most renters but also shift the burden of economic difficulties, inflation and other costs onto the housing provider with no counterbalance. This drives housing providers out of communities, stalls new development, reduces the supply of rental units, lowers property values, and over time harms that area’s economy. It is the type of “Band-Aid” policy that doesn’t come close to addressing the root issue and ultimately does more harm than if nothing had been done at all.
So, what is the solution? Build more housing. Incentivize communities to invest in affordable housing and housing providers to participate in programs such as the Housing Choice Voucher Program, which assists low-income individuals with housing costs. NAR’s message on this issue has been consistent and clear to federal, state and local policymakers: Shifting the burden to housing providers will only make the housing supply and affordability issues worse. Governments have tools already at their disposal—federal grant programs, coronavirus State and Local Fiscal Recovery Funds, and U.S. Department of Housing & Urban Development programs—that can be used to help. In addition, states can take action to remove barriers to housing development, such as overly restrictive zoning and permit wait times.
NAR provides resources you can use to educate policymakers on why rent control doesn’t work, as well as tools to push back against rent control initiatives. These include a rent control “Hot Topic Alert,” a white paper on rent control, and Issues Mobilization grants for state and local associations. Finally, NAR helped found a coalition of influential housing provider industry groups to share our resources and develop new ones while maintaining a consistent message: no to rent control. To win, we must share this message at the federal, state and local levels, while presenting other policy solutions. With the REALTOR® family behind us, we know we can be successful.