The current housing crisis in America is a multifaceted issue, exacerbated by a series of failed government policies that have left millions struggling to find affordable housing. Vice President Kamala Harris's recent proposal to impose federal rent control on corporate-owned rental properties raises red flags for many economists and housing experts. Such a blanket policy could ultimately do more harm than good, as even a casual analysis of historical outcomes reveals that rent control often leads to a decline in housing quality, a decrease in new construction, and higher overall costs for tenants in the long run.
Historically, rent control has been described by economist Assar Lindbeck as "the most effective way to destroy a city other than wartime bombing." While this might sound hyperbolic, numerous studies confirm that rent control discourages investment in housing. Landlords facing caps on what they can charge tenants may hesitate to maintain existing properties or build new ones, knowing that their potential for return is curtailed. Consequently, we see a paradox: while rent-controlled areas may initially provide affordability, they ultimately lead to a housing shortage that drives prices up in uncontrolled regions.
Former President Donald Trump’s opposition to zoning reforms that could open suburbs to more housing also complicates matters. Without significant changes to zoning laws, any initiative designed to alleviate the housing crisis is bound to fall short. Expanding housing options in suburban areas is not just a matter of fairness but also a necessity for accommodating a growing population. Resistance to zoning reforms furthers the supply crisis and thus, perpetuates inflated housing costs, making the dream of homeownership increasingly unattainable for many Americans.
With a climate that is less than conducive to constructive policy changes, it may seem that we are at a standstill. If I had to wager on whether a thousand monkeys could type out Shakespeare's "King Lear" in a year or whether either candidate could successfully address the housing crisis in a century, I’d put my money on the monkeys. The likelihood of meaningful change feels painfully low given the track records and proposals currently on the table.
Harris's federal rent control plan, while well-intentioned, risks establishing a nationwide disaster reminiscent of the experiences seen in cities already grappling with such policies. Currently, builders can relocate to jurisdictions that are more open to new housing developments, but federally imposed rent control would negate this escape route, limiting options for construction and innovation in housing. As we look to the future, it's critical to recognize that a one-size-fits-all solution to the housing crisis is unlikely to work.
Instead of perpetuating the failures of the past, policymakers should focus on addressing the regulatory barriers that deter investment in housing development. The construction industry has long advocated for the streamlining of regulations to simplify the homebuilding process. By making it easier to build housing, not only could we expand supply, but we also foster a more competitive market that can better meet the needs of diverse populations.
The complexities of the housing crisis require thoughtful legislation that balances the needs of renters, builders, and communities. To genuinely tackle this issue, we need to move beyond outdated and harmful policies like federal rent control, which, while appealing as a quick fix, ultimately fail to address the root causes of the crisis.
For readers interested in a deeper exploration of these concepts, my newly published book, "Nowhere to Live: The Hidden Story of America’s Housing Crisis," chronicles the myriad ways government interventions have perpetuated this crisis and offers insights into potential solutions. You can find it on Amazon under my store ID: justice1965-20.
For those seeking quality content on this issue and more, visit my blog at justicepretorius.blogspot.com and justicepretoriuscom.wordpress.com. Your support for my work is greatly appreciated; consider buying me a coffee at https://www.buymeacoffee.com/JusticePretorius. Together, we can advocate for meaningful change that addresses the pressing issues of housing in America.
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