Opinion: The Federal Government is threatening to withhold rent subsidizes if rent goes up too much

Mark Harmsworth of the Washington Policy Center explains that rent control reduces access to new affordable housing. When the government imposes price controls, supply quickly dries up.


Mark Harmsworth explains that rent control reduces access to new affordable housing. When the government imposes price controls, supply quickly dries up

Mark Harmsworth
Washington Policy Center

In a backwards approach to helping tenants, the Federal Government is capping rent increases on subsidized housing at 10 percent in a bid to reduce the cost of rental properties. The result, should the measures be adopted, will be exactly the opposite and rents will go up.

Mark Harmsworth, Washington Policy Center
Mark Harmsworth, Washington Policy Center

When you place caps on rent, instead of letting the market drive the pricing, the supply of rental property declines and the result is higher demand and higher prices for rent. There is a short-term impact to rental costs, but as many studies show, including a Brookings Institute study, long term rental housing supply goes down and rents go up.

Rent control also creates ‘apartment lock’ – people in a rent-controlled apartment don’t want to move, fearing they’ll lose the sweetheart deal the law provides. Eventually, property owners are forced to sell or move into the apartment to prevent when they can no longer afford the upkeep of the property due to property tax increases and the cost of maintenance and upgrades.

In the Washington State Legislature, House Bill 2114 (HB 2114), otherwise known as rent control failed to pass earlier this year. HB 2114 would have limited rent and fee increases to 7% and would have increased the notification period to 180 days for increases over 3%. The tenant would have been able to terminate a lease within 20 days and if the increase is over 7%, the tenant would have received damages and up to three months’ rent.

Similar to HB 2114, the Transit Riders Union members are asking the Tukwila City Council to pass a similar statute.

Rent control reduces access to new affordable housing.  When the government imposes price controls, supply quickly dries up.

Instead, policymakers and city councils should make housing more affordable by cutting property taxes and pointless permitting rules that make building homes so expensive. If the supply of rental property increases, rental costs will go down.

Mark Harmsworth is the director of the Small Business Center at the Washington Policy Center.


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