By Jim Lapides, Senior Vice President of External Affairs, NMHC
Jim Lapides is Senior Vice President of External Affairs, with responsibility for leading award-winning, multidisciplinary initiatives that advance the multifamily industry and its issues in Washington, DC and around the country. He is also responsible for the Council’s nationwide efforts on rent control and serves as a spokesperson for the industry.
In July, President Biden called on Congress to pass legislation requiring corporate property owners – defined as those owning 50 or more units – to cap rent increases at five percent or risk losing federal tax benefits. The negative response, from both left- and right-leaning experts, was swift. Although it remains to be seen if Vice President Harris will endorse the same or a similar proposal, at a recent campaign stop, she pledged to “take on corporate landlords and cap unfair rent increases.” See a sampling of the negative commentary from policy and housing experts about the Biden proposal:
- “This kind of cap would lead to less affordable housing being built and substantially increase hosting costs.” - Governor Jared Polis (D-Colorado) (Twitter/X)
- “Rent control has been about as disgraced as any economic policy in the tool kit.” - Jason Furman, former Chairman of the Council of Economic Advisers under President Barack Obama (The Washington Post)
- “Rent control is a bad idea… we want a world of abundant housing, and you get that by making it easier to build more housing, not by making it less profitable.” - Matthew Yglesias, leading economics and policy writer (Slow Boring Substack)
- “I wish Democrats would spend less time on dumb, reactionary policies like rent control… We need to build things. Lots of new homes.” - David Brooks, New York Times Columnist (The New York Times)
- “[Biden] also recently proposed a nationwide rent control policy for landlords with more than 50 units. But hundreds of studies have shown that such policies worsen housing affordability. That’s because rent caps raise prices in non-rent-controlled units and discourage new construction,” –Catherine Rampell, Washington Post Economics Columnist (The Washington Post)
- “Rent control isn’t just ineffective but counterproductive. Trying to solve a housing shortage by weakening the signal that something’s wrong is like trying to lose weight by breaking your scale: You may feel better in the moment, but your problems will probably get worse. In the case of rent control, landlords will decide not to build or operate units that are unprofitable at the capped rents.” – Megan McArdle, Washington Post Columnist (The Washington Post)
- “1.25 million people have moved to Houston metro in the past 10 years. Despite that influx, medium rents in area only rose by 2.8% annually during that time... Subdued rent growth wasn't because of price regulation; it was because good housing policy allowed construction.” – John Arnold, Founder, Arnold Ventures (Twitter/X)
- “Rent caps don’t work and will have a chilling effect on housing supply… exempting new construction will do nothing to change this, making clear that long-term investments in housing can be made uneconomic retroactively.” – David M. Dworkin, National Housing Conference President and Chief Executive Officer (Bloomberg)
- “Rent caps have many unintended consequences, foremost that fewer homes will be built. It will also create inequality in the rental market − those that will benefit versus those that won’t. And it will lead to inefficiencies − people unwilling to move or downsize because they have a rent-controlled unit.” - Tobias Peter, Co-Director, American Enterprise Institute Housing Center (USA Today)
- A federal rent cap “would collapse the housing market throughout the country just as it would surely wreck lending, building, and the quality of life for tenants everywhere.” – Joseph Strasberg, New York Rent Stabilization Association (Daily News)
Following the Biden proposal, the Center for Global Markets at the University of Chicago Booth School of Business released a poll exploring rent control views among top economists at leading U.S. universities. Among the findings:
- No economist agreed rent control would substantially reduce income inequality.
- Just 2% of economists surveyed agreed that a national rent cap would make middle-income Americans substantially better off over the next 10 years.
- 62% of the economists agreed or strongly agreed that the Administration’s rent cap proposal would substantially reduce the amount of available apartments over the next 10 years, compared to just 7% who disagreed.
To learn more about rent control, visit www.nmhc.org/rentcontrol. To learn more about solutions, visit https://housingtoolkit.nmhc.org/.