New Report: The Impact of Rent Control Across America
A new analysis shows recently enacted rent control polices in cities across America hurt housing supply.
The new NAA reports interviews with housing providers and developers from three different markets impacted by rent control policies and proposals: St. Paul, Minn; Santa Ana/Santa Barbara; Calif; and Portland/Eugene, Ore. The interviewees ranged from large firms operating thousands of units and having properties across the country to small mom-and-pop businesses with a handful of units and, often, invested in real estate as part of a retirement plan or second source of income.
The housing provider research was supplemented with an online public opinion poll across the United States in February 2023. The poll questions focused on housing availability, residential construction and policy perspectives. Below are the key findings from the interviews and public opinion poll.
Rent control reduces investment and
development: Over 70% of housing providers say rent control impacts their investment and development plans; actions include reducing investments, shifting plans to other markets, and canceling plans altogether.
Rent control deters maintenance and
improvements, pushing owners to sell: With rent control in effect, housing providers are faced with the difficult financial strain of absorbing essential maintenance costs and are forced to reduce investments in improvements and nonessential maintenance. As a result, 54% said they expect to or would consider selling some assets.
Rent control policies subsidize
high-income residents: Nearly 60% of rental housing providers know of higher-income residents who benefit from these policies. Additionally, almost half of poll respondents incorrectly believe rent control only provides affordable housing to low- and moderate-income households.
The report concluded that while the notion of rent control policies may appear as an appealing solution to housing affordability, it is critical to acknowledge their potentially counterproductive and damaging consequences. Rent control has been proven to negatively impact renters, housing providers and even entire communities. This research shows that rent control policies can inadvertently lead to reduced housing supply, lower property values and decreased quality of available properties. Additionally, rent control disincentivizes new construction, which could exacerbate the housing affordability crisis
Click here to read the report.