Not to rehash old bad history… but remember the housing crisis, when some homes sold for less than their replacement value? While markets have recovered, the housing crisis is still impacting our current market. New housing construction all but stopped during that time because a foreclosure could be purchased for less money than it could be built. Fast forward to 2017, and California now faces a statewide housing shortage. Statewide, we need to build at least 100,000 more units each year to keep up with demand.
This causes housing prices to increase for both ownership and rental housing. Rents throughout the state, including Sacramento, have gone up significantly. This creates an obvious hardship for those in the rental market.
Rent control does not help its intended audience. Studies show that jurisdictions who enact rent control find maintenance levels and quality of available properties diminish. Landlords will raise rents every time they are allowed under rules of their particular ordinance. This contrasts with a free market system, where a landlord who has a good tenant may go for years without a rent increase because they want their tenant to remain in the property.
The current housing situation is an issue of supply and demand. Due to the lack of construction, supply is not keeping up and prices are increasing. California and the Sacramento Region need to build more units to solve the issue of pricing. We need additional units at every income level: rapid rehousing, workforce housing, and market rate housing.
And what about the more sinister side of rent control? Proponents point to single parents or elderly on a fixed income who need rent control. But with standard rent control proposals, there is no guarantee the populations we are all concerned with will be helped. Nothing ensures that a rent control unit goes to that single parent and not a savvy tech executive making in excess of $100k per year.
What if jurisdictions thought about the issue differently? What if we discussed the idea of housing subsidies that only went to those in need of help, those who could be verified by income and family status? While rent control comes with many issues of hindering the free market, diminishing the availability of high quality housing, and creating predictable rent increases, the idea of providing subsidies to those who are struggling to make ends meet is something most can get behind.
– Caylyn Wright, SAR Government Affairs Director