How Rent Control Threatens the American Dream

It’s no secret that many parts of the country are experiencing a housing affordability crisis. Homelessness is on the rise in high-cost urban areas, and skyrocketing rental prices mean that families have an increasingly tough time making ends meet. This dismal state of affairs is concerning for those who live in these areas already, but a potentially much larger problem—and one that could have effects for generations to come—is the disappearing ability of families across the country to move into these dynamic areas in the first place.

Even economists who typically favor government intervention don’t like rent controls because they simply fail to achieve their intended goal of controlling rental costs.

To address these problems, policymakers in California and Oregon (among the worst states for housing affordability) have decided on the one policy choice that is almost universally despised among economists: rent control. The idea has also received support from Senator Bernie Sanders (I-VT), who has made national rent control a key part of his presidential campaign. The quintessential “sounds good, doesn’t work” policy, rent control is a government-imposed limit on how much landlords can increase rents for the property they own. Once signed by Governor Newsom, the California legislation will limit increases in rent to 5 percent plus the rate of inflation. Oregon lawmakers passed a statewide rent control law in February that limits rent increases to 7 percent plus the rate of inflation.

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