“Rent control is a failed policy,” said Greg Brown, SVP for government affairs at the National Apartment Association, in the opening panel at GlobeSt Apartments in Los Angeles yesterday. Brown kicked off the two-day conference, speaking on the An Economic and Regulatory Briefing: What’s Possibly Ahead for the Multifamily Sector? panel, moderated by Ed Zimbler, senior managing director conventional organization at Berkadia.
The discussion focused on rent control regulations across the country, including California, which most recently passed a statewide rent control measure. “Forty years of research has proven rent control is the wrong answer. It is a failed policy. Full stop,” he said.
Part of the problem is the lack of available for-sale housing, which has kept renters in the multifamily market longer than in past generations. Brown said that homeownership continues to decline while the number of renters increases. Nationally, there are 36 million apartment residents. As a result, housing affordability has become a key topic, and it is fueling the call for rent control.
New York, Oregon and California are all states with active rent control campaigns, but Brown said that markets across the country are adopting rent control or tossing it to local municipalities to decide. Rent control isn’t the only housing-related policy coming out of the state legislators, but Brown calls it the most “onerous.” There are also markets offering alternative solutions to rent control, like Illinois, which Brown said “was able to put together a proposal to push back against rent control.” He added that 60% of people say yes to rent control because they think it is the only option. However, once they hear alternatives, there is room to change the conversation.
Changing that conversation, however, comes from having a seat at the political table. Brown encouraged audience members to get involved in fighting back, whether that meant joining an organization or writing a letter.
However, the current efforts to fight against rent control have paled in comparison to the efforts for rent control, and Brown expects those efforts to grow. “The political makeup of the country have come to such a place that we are going to see more of these policy proposals,” he said. “They aren’t going away and a lot of new states are going in that direction. We are going to see more activity in this area. We are going to have to get used to this fight. Policy makers need to hear from our side. This is the new normal, at least for the next five years.”
Washington State, Minnesota and even Arizona—which surprised some because it has a history of being a conservative state—are all looking at rent control measures. Northeastern state are also a big concern. The issue is also not as politically divided as one might think. There are people on the fringes of both parties that present challenges to the industry.