The definition of rent control is, the government regulation of the amount charged for housing. For most rent control cities this boils down to regulating the amount landlords charge for rent while narrowing their options for eviction.
There are some voices in our community calling for rent control and they bring a persuasive argument. Perhaps the most compelling truth is that a full-time worker making minimum wage can no longer afford a typical one-bedroom apartment in Reno. Frankly, we’re seeing a shortage of work-force housing at almost every price point. In addition to paying record high rents today tenants also face instability in the future, what will rates be next year? I feel strongly that we need to do something but rent control is not the answer. Here are a few reasons why I feel that way.
· It will help, for a little while: Stanford Business School recently published a long-term study of the effects of rent control in San Francisco between 1994 – 2010. This study concludes that the big beneficiaries were the tenants that leased under the original policy enacted in 1994. By 2010 the total financial benefit gained the early group was virtually erased as new tenants replaced the old. Basically, rent increases were infrequent but when they went up, they went way up.
· Landlords should not absorb the entire cost: The city needs to step in with reasonable zoning and density deregulation. Reno should also consider subsidies for the right housing projects. Last but not least, the (insert minimum wage downtown employer here) industry needs to take some ownership in this. There is no doubt that a great number of their employees qualify as the target market for rent control policies.
· Investors and developers will adapt or flee: Nobody wants to defend a greedy landlord but seriously, why invest if your potential income is limited? Perhaps more worrisome than that, “regulated”. Since the 1994 San Francisco rent control policy applied to rental homes only, many landlords simply modified or re-built their units as condos then sold them. Ultimately limiting the options rather than creating opportunity for low-income tenants. Keep in mind that The Stanford Study took place in the Pre-Air B&B era. Reno is a destination city and the typical mom & pop landlord has other options to consider.
In the end I’m a big fan of private property rights so I’m not very objective in this topic. My real heartburn with rent control lies with the fact that it doesn’t address the basic problem; we don’t have enough homes available for the people that want to work and live here. Fix that and our housing market will find its’ own balance. Feel free to send comments to dan@nvhomeconncetions.com