Aldo Svaldi wrote a great story last week in the Denver Post on Senate Bill 19-225 that would end a statewide prohibition against local governments implanting rent control policies. This bill doesn’t provide rules on what can be done or can’t be done; instead the bill gives local municipalities the discretion to come up with their own solutions. Backers of the bill argue rent-control measures would limit rent increases while the market catches up with demand. This is true; but do we want this long-term?
Teo Nicolas with the Joint Center for Housing Studies at Harvard who represents the Apartment Association of Metro Denver, said “rent control is the worst approach” to our housing affordability crisis. Further, “Nicolas likens it (rent control) to turning on the air conditioning to address the warming climate. It doesn’t get to the core of the problem, which is a lack of supply.”
Nicolas cited a Stanford study that found in the Bay Area that rent controls caused the renters of single family homes and condos to sell their properties to owner occupants, thus reducing the supply of rental housing. Whoops!
Later Nicolas says “The better way to align tenants and landlords is to create so much supply that landlords compete for customers and strive to keep them, the argument goes, Competition is what will limit rent increases, and local governments have a role in fostering that.”
But, do our local governments foster additional supply and more competition? The answer is a resounding NO!