Rent Control: A Failed Solution To Housing Unaffordability
Rental prices have reached near historic highs and are big drivers of the consumer price index—the primary measure of inflation.
Average rent prices have increased 8.9 percent per year since 1980, but the acceleration in overall inflation in 2021 drove the national average to over 18 percent year-over-year. As a result, nearly 15 million U.S. renter households are cost-burdened—meaning they spend more than 30 percent of their income on rent and utilities. Household budgets are strained, with low-income families shouldering a heavier burden.
Rent regulation may appear to be an appealing solution to housing unaffordability. Advocates push policymakers to impose new restrictions on rental increases. However, rent regulation leads to counterproductive outcomes at best and devastating impacts at worst. Rent control and rent stabilization:
- Shrink the supply of rental housing
- Reduce the quality of rent-controlled units
- Worsen inequities by allowing some wealthier residents to exploit the system to the detriment of poor and disadvantaged individuals
- Punish property owners and disincentivize them from renting out their units
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