By Chris Kramer — Aug 5, 2023
If passed, the Justice For Renters Act would repeal the Costa-Hawkins Rental Housing Act. As is often the case, the name is misleading. The measure would hand more authority over rent control from the state to localities, allowing cities to impose more extreme forms of rent control, and remove rent control prohibitions on properties built after 1995. Attempts to expand rent control and repeal the Costa-Hawkins Rental Housing Act have been placed on the ballot twice before, and voters defeated them each time. Advocates of rent control claim that price controls will keep prices down and reduce homelessness. But high housing costs are a result of supply and demand. If costs are to come down, there needs to be an increase in supply and development. Rent control does nothing to help achieve that. As an unintended consequence, it achieves the opposite result. We can see this bear out in cities that have rent control. Rental prices and homelessness in those cities are higher. When you put controls on rents, you disincentivize owners and landlords. They are adversely affected. Over time, more and more owners and landlords take their properties off the market. Developers abandon plans to build or make available additional rental housing units. The net result is an even greater shortage of rental housing. In turn, rental housing becomes even more unaffordable. More who cannot afford rent become homeless. Instead of foolish rent control policies, we should be doing things to spur development. The free market is good at providing unmet needs and balancing supply and demand. It doesn’t happen overnight. But it can happen over time if we get burdensome government restrictions and bureaucracies out of the way.