Housing, like food, is important not just for survival but also for expanding opportunity for people of all levels of income. When housing is scarce, people with fewer dollars to spend feel the downsides of lack of housing supply the most. Those families see a greater and greater share of their incomes consumed by housing costs. And those families are disproportionately people of color, seniors on fixed incomes, and others who have limited ability to earn more money. 

Rents go up when supply does not keep up with demand. If bread was in short supply, and lots of people wanted it, there is no doubt that price for bread would –as the press loves to repeat – “sky rocket.” When prices rise poor people suffer. The solution is to bake more bread. The same is true with housing. When production rises to meet and even exceed demand, then developers and landlords compete with each other instead of tenants or buyers competing with each other for limited housing products. We need more housing so that it will be affordable. 

Rising rents don’t cause homelessness; rising rents are a symptom of housing scarcity. Lack of adequate housing supply is a cause of homelessness. A recent Seattle Times article showed that rent increases are slowing and, in fact, many new buildings are offering concessions, essentially lowering rent, because there are more options for consumers. More building has created this opportunity, not controls on rent or housing prices. 

Make no mistake SB 6400 is a rent control measure. While advocates suggest that it is simply a local control bill, aimed at allowing local jurisdictions access to price controls that they don’t now have. Seattle will impose rent control. They’ve already passed a resolution saying so, and Seattle’s actions will encourage others. 

Rent control, like all price controls, assumes that landlords set average rents. They don’t. Market dynamics – supply and demand – determine price. Think for a moment: if a land lord wanted to get rich quick, why wouldn’t she set her prices at $10,000 a unit? People couldn’t pay that price, right? So she’d keep lowering her price until someone was able to pay. That’s how it works. Landlords can only charge what people can pay and they have to generate enough revenue from rent to pay for operating expenses. 

Rent control will limit and distort supply be creating disincentives to build new housing and to spend more money to maintain and improve existing housing. If rent controls are imposed, landlords will have not choice but to keep their rents as high as possible just to operate their buildings, and making improvements won’t be an option. And investors would avoid new housing because of the risks of getting a return on their investment. 

There are alternatives. We can help buy down existing cost burden with direct cash payments to help with rent. We can create more rent restricted housing with tax exemption programs like the one in Seattle that has created thousands of rent restricted units. And we can support low interest loan programs to help landlords maintain older buildings so improvements don’t get passed on in the form of higher rents. And it makes more sense to use subsidy dollars to simply give people money to help pay their rent.