I’ve already covered the folly of rent control and really all price controls in other posts. When government tries to control prices because of inflation, prices simply go up and supply disappears. Without any motivation to produce more housing it becomes even more scarce. Furthermore, housing becomes more difficult to maintain and operate because mosts costs are not fixed, and go up even when rents are controlled or go down. There’s a great post on the real time disaster of rent control in the Bay Area by John McNellis at The Registry. He covers all the problems being created in that market succinctly. One of the reasons given for more regulation and rent control is the power of big, corporate land lords and foreign investors. But McNellis points out the long term implication of the anti-growth and anti-capitalist proposals:

The ordinance discourages landlords from doing anything beyond critical repairs—your tenants demand services and improvements, while telling you how deep to shove your rent request. And, finally, perhaps worst, because of the many abuses it engenders, the ordinance drives well-intentioned amateurs out of the business, leaving the city’s housing stock in the hands of case-hardened professionals, landlords who will bring a handgun to a knife fight and who are grimly prepared to go mano-a-mano with tenant lawyers, real and otherwise.

When I went on The Stranger’s Blabbermouth podcast a while back, I made the point that as more and more measures are implemented to squash housing creativity in the market, control prices, and limit the discretion building operators have, the worse things will get for tenants. Why? Because the costs of operation are going to be too much for smaller, local land lords. Most land lords running existing, older, less expensive housing are either the “amateurs” or part time land lords that McNellis describes or small business owners.

As the weight of regulation and controls gets more onerous, the only builders and operators that will be able to build and operate housing in Seattle are large corporations with the capacity and scale to wait for permits for 36 months and hire lawyers and building management staff that can fight with tenants. What the City Council and Mayor are doing in the name of fighting corporate greed is ensuring that the big corporations they must think build and operate housing but don’t now, will be the only entities left standing.