Rent control is a bad idea. Unless, of course, you happen to be a politician. In Oregon, where progressivism found a captive audience, rent control is about to impact the entire state. Unfortunately, the very bad, unintended consequences of this policy will also be impacting the poor and low-income residents more than politicians would like to admit.
Oregon House Speaker Tina Kotek (D–Portland) and her state Senate buddy, Ginny Burdock (D–Portland), introduced SB 608, a bill that would keep landlords from increasing rents for tenants’ first year, adding limits to how much rent can increase in the future as well. If this bill, which appears to have enough support, becomes law, Oregon would be the first in the country to adopt statewide rent control.
Supporting elected officials quickly embraced the idea, especially in light of the home and rental price increase across the country. Portland Mayor Ted Wheeler and Gov. Kate Brown were some of the first to come in favor of the idea publicly. And according to Kotek, the changes proposed in this bill are long overdue.
“We are long past the point when we should have passed meaningful tenant protections,” she told reporters. “Clearly more needs to be done statewide to give renters more security and stability.”
But while it may seem clear to her government has the duty to interfere on behalf of low-income Oregonians, the reality is that it’s government’s interference itself that drives the cost of housing up.
In the Beaver State, issues have only worsened thanks to stringent zoning rules that keep developers from building multi-family buildings in single-family housing zones. In addition, the state has rules in place that limit the areas where construction can occur. That prevents rural areas near urban regions from being developed. With such a restricted supply, it’s hard to bring the cost of housing down.
With this bill passing and the state limiting landlords’ options further, Oregon would only be worsening the situation. And those who hurt the most are the ones local politicians claim to be trying to help.
Rent Control: Elitism Disguised As Benevolence
Rent control works by taking property rights away from rightful owners. In the end, meddling with the market becomes such a burden that the only ones who can afford to live in rent-controlled areas are the rich.
That’s because the government removes value from residential properties when it limits what landlords can do. This keeps property owners from accepting offers from potential renters or buyers. With fewer incentives to keep their properties desirable, landlords either slack on maintenance and the quality of rental collapses or they choose to convert their rental units into condos to escape rent control rules, increasing the overall cost of housing cost. With officials resisting opening up the land for development on top of it all, competition in the market suffers. The result? The poor and low-income residents have no place to go.
If compassion and affordability are the goals, politicians should release the housing market — not restrain it further. But to politicians who rely on empty promises to stay relevant, passing legislation that further hurts the consumer while promising the opposite is a good game to play. After all, voters will continue to come to them for solutions, even though they were the ones who caused the problems in the first place.