Rent Control

A growing number of households in the United States are paying more than 30% of their incomes on rent, and policymakers at the local, state and even federal level are increasingly pursuing rent control measures as a solution to this growing housing affordability problem. However, countless studies over the years have found that rent control is counter-productive as a mechanism for addressing housing affordability problems.

For example, economist Ken Rosen of UC-Berkeley, in his 2020 NAHB report on rent control, points out that “the vast majority of economists agree that artificially controlling apartment rents acts as a price ceiling that reduces the supply of housing over time.” Moreover, in an earlier 2018 study for the Fisher Center for Real Estate & Urban Economics, Rosen points out that “rent control is need-blind” and “fails to ensure that the benefits of lower rents help those most in need.” He further points out that rent control creates housing scarcity and penalizes a large and increasing number of would-be renters, as the rental housing supply is suppressed or shrinks. Moreover, rent control provides incentives for owners to convert existing rental apartment buildings to condominiums, and impedes and/or provides disincentives for new construction.

Addressing the housing affordability problem is complex and will require efforts on many fronts, but ultimately these efforts must involve more production of housing, not less. If housing demand outstrips supply, prices go up, and that is what has been happening in many parts of the United States in recent years.

Policy Statement

NAHB is unequivocally opposed to rent control in any form at any level of government. NAHB will actively oppose residential rent control at the national level, in state legislatures, in voter ballot initiatives, and in local communities where it may be introduced, and seek to educate policy makers and all other people of our nation regarding the very harmful effects and negative unintended consequences of rent control.

Why It Matters

NAHB strongly opposes rent control because it does not address the underlying issues that result in the lack of affordable housing and only creates more challenges, including reduced supply of available units and reduced income to states and municipalities because of slowed or halted development.

Housing affordability to a large degree is a regulatory and supply issue, and needs to be addressed by:

• Creating more and better housing by allowing more high-density housing,
• Reducing regulations and lawsuits that slow or stall housing development,
• Encouraging public/private financing and partnerships to encourage the development of affordable housing, and
• Offering direct public subsidies to help those that need it.

Instead of adding more regulations and risk via rent control, policy makers should be looking for ways to reduce regulations, remove barriers, and add incentives for developers to produce more housing, especially affordable and workforce housing.

Check out NAHBNow for the latest activity related to rent control.