The City of Inglewood has adopted a short-term rent stabilization policy as a response to a housing shortage and rising home costs in the market. The Inglewood City Council voted to pass a temporary ordinance that will cap rent increases at 5%. The ordinance will last 45 days, and in the interim, the City Council will discuss whether to extend the ordinance for a year.
Greg Brown, SVP of government affairs for the National Apartment Association, attributes the new ordinance to a lack of housing supply and “burdensome” construction regulations that create high barriers to entry in the market for new development. “It is not because of new rail lines or an NFL stadium,” says Brown. “Politicians frequently use rent control as a quick fix, but the real solution is more complex and includes streamlining regulations to help ease those barriers to construction.”
Inglewood has a severe housing shortage, and has seen little new construction activity. Brow, however, says that this new policy will only exacerbate the problem. “Inglewood is already far behind where it should be to meet its housing requirements,” he says. “The city has only constructed 84 units by year six of the plan—of those 84, just 40 were affordable—and must build 929 more in the next three years, which is nearly impossible. Rent control ensures the city won’t meet that goal by preventing cities from attracting the investment in new rental housing construction It’s a quick fix that elected officials use to try and help lower-income renters, which is regrettable, as these same residents are often the victims of rent control’s squeeze on housing supply.”
Still, as the city looks for a solution to the affordability issues, it is likely that this temporary ordinance will be replaced by a permanent one. “Each city’s reaction to the effects of rent control is different, however, I predict this temporary measure will probably eventually be replaced by a permanent rent control system,” adds Brown. “In 1943, New York City adopted what was initially a temporary rent control measure through the “War Emergency Tenant Protection Act”. It’s been 75 years since and the city has some of the strictest controls on rent in the nation.”
Rent control and rent stabilization policies have grown in popularity throughout California and the West Coast as housing has gotten more expensive. However, in November, Californians voted down Proposition 10, which would have lifted Costa Hawkins and given local municipalities to expand rent control measures. “Despite voters resoundingly rejecting Proposition 10 last November, some policymakers across the state still say rent control is an effective solution and will look to implement it,” says Brown.
Brown’s solution is a framework of housing assistance programs, new zoning and better construction regulations. “The real solution to the housing affordability problem in California — and across the country —is a combination of direct rental assistance and streamlining restrictive zoning and costly building regulations at the local level,” he explains. Rent control results in skyrocketing rents, lower investment, more competition among renters for an ever shrinking supply of affordable housing options, which is what we see in San Francisco.”