Rent control creates a stagnant market.
As household incomes naturally increase, renters in a rent-controlled environment are incentivized to stay put, even if they’re making well over $100,000 a year. These tenants move at a rate three times less often as renters in non‐rent controlled units.
Rent control reduces the quality of rental housing.
When government places an artificial control on rent, property owners are not able to adjust rents to accommodate increased costs or unexpected circumstances, and properties deteriorate.
Rent control ordinances lead to higher rents.
Although people think rent control will lead to lower rents, the opposite is true. The rents of available apartments in rent-controlled cities are dramatically higher than rents in cities without rent control. In cities without the policy, available units run the gaumt from low‐priced to high‐priced. In rent-controlled cities, the only units available are the highest priced, far above the median rent.
Rent control erodes the life savings of people who have invested their money in real estate.
Most people who work in real estate do not have traditional retirement plans. Their lifelong retirement savings are generally invested in what they know best, real estate. Rent control ordinances that prohibit property owners from asking for market-rate rents unfairly steal from the retirements of real estate professionals.
Rent control creates substantial administrative costs.
The administrative costs of rent control can be substantial. Rent controls require the creation of convoluted bureaucratic systems. Rental property must be registered, detailed information on the rental property must be collected, and complex systems for determining rents must be created, and processes for hearing complaints and appeals must be established. In Santa Monica in 1996, the Rent Control Board had a budget of more than $4 million a year to control rents for only 28,000 units.
Rent control means expensive consumer entry costs.
In many rent-controlled communities, prospective consumers must pay substantial finder’s fees to obtain a rental unit, due to the scarcity of available housing. And, in some rent‐controlled areas, a “gray‐market” in rental housing has developed in which units are passed among friends or family members, or new consumers may be required to pay “key money” or to make other payments to current consumers to obtain housing. Sub‐leasing is common in rent‐controlled cities.
Rent control artificially destroys home and apartment values.
Plummeting values adversely impact schools and city services. As home and apartment values decline, revenue from the county also declines. This jeopardizes the long-term health of schools and city infrastructure such as police, fire, and other services.