John Braun: Rent control isn’t a real answer to the shortage of affordable rentals
Posted Friday, January 17, 2025
Senate Republicans believe in lowering rental costs by increasing the supply of rentals.
For all their talk about the need for affordable housing in our state, our Legislature’s majority Democrats don’t seem to know how to effectively address that need.
The latest example is the renewed push for what Democrats insist on calling “rent stabilization,” which is simply a different name for rent control.
In 2024, the Democrat-controlled House moved a rent-control bill through on a partisan vote, only to see it die in the Senate budget committee near the end of the session. But with the Senate Democrats leaning more to the left following the outcome of the November election, rent-control advocates seem to think 2025 is their year.
On the first day of this year’s session, the House housing committee held a public hearing on the latest version of that legislation. As I write this, the committee has already scheduled a vote to move HB 1217 forward. The goal clearly is to fast-track the bill over to the Senate sooner than last year.
No matter how quickly the rent-control bill does or doesn’t move once it reaches the Senate, there is no getting around the fact that passing it wouldn’t do a thing to increase the supply of rental housing.
To paraphrase the eminent American economist Thomas Sowell, rent control doesn't mean that there are more apartments available, just that prices of existing apartments are being kept artificially low.
California, Oregon, New York, and the District of Columbia have some form of rent control. So do St. Paul, Minnesota, and Maryland’s most populous county. Compared to them the Washington bill would generally be harder on rental owners.
For instance, HB 1217 would put a 7% cap on annual rent increases and a 1.5% cap on late fees. It would require landlords to give 180 days’ notice for rent increases of 3% or more, which is at least twice as long as the corresponding notice requirements in California, Oregon, New York, and the District of Columbia. Also, the Washington bill would exempt rentals occupied for less than 10 years, while California and Oregon have a 15-year exemption.
You wonder how the Democrats behind HB 1217 arrived at those arbitrary limits. And if the legislation becomes law, there is no reason for rental owners to trust those standards won’t be ratcheted up or down on short notice.
The new Senate majority leader recently acknowledged, correctly, that there will be no solution to the affordability crisis “unless the private market is producing more housing than it has been.”
Senate Democrats, he added, will work to encourage that production — but at the same time he expects significant interest among his caucus members in “some form of rent stabilization.”
If anything, imposing rent controls will give rental owners in Washington less incentive to continue renting, or maintain their rentals, because they wouldn’t have the freedom to increase rents to offset higher management and operational costs. Increases in property taxes, utilities and insurance rates can often exceed 7% annually.
And think about this for a moment: the majority party that wants to put a cap on rent increases also wants to lift the cap on the annual growth rate of state and local property-tax increases. That could clearly squeeze rental owners.
Republicans know the most effective way to address the need for affordable housing, whether it’s to rent or to buy, is to increase the supply of homes. That’s one of the reasons we consistently oppose the majority’s efforts to adopt restrictions that would add time and cost to residential construction.
When it comes to rentals, our position is backed by a national rent report published this month by the Apartment List website. It shows clearly that the metropolitan areas in the U.S. experiencing the largest year-over-year reduction in rent prices are also the metro areas most active in permitting new multifamily homes.
The Austin, Texas metro area was the leader in both categories, permitting new homes at the fastest rate in the nation while rent prices dropped a dramatic 7.4%.
Similarly, a “state of the state’s housing” report released in October by the University of Washington credited a surge in new apartment construction with helping to slow rent growth to 1.6% annually between 2022 and 2024. For the previous seven years, rent growth had been closer to 5.5% annually.
The fixation with rent control feels like an attempt to relive the pandemic-related policies that were tipped so heavily against landlords and an effort to vilify rental owners — in the same way that the Senate Democrats’ strategy for selling their new multibillion-dollar set of tax proposals includes vilifying the “wealthy few.”
It’s a foregone conclusion that the House will pass a rent-control bill to the Senate for a second straight session. But to say it again, controlling rent prices would do nothing to produce the additional housing that would benefit renters most.
As Thomas Sowell put it, there’s a crucial distinction between intentions and consequences. “Economic policies need to be analyzed in terms of the incentives they create, rather than the hopes that inspired them,” he wrote.
Affordability is a top priority for Senate Republicans, and housing costs obviously have a major influence on the cost of living. But it seems just as obvious that rent control is really a form of price control and isn’t a real answer to the real shortage of affordable rentals in Washington.
There are many things state government can and should do — like changing policies to free up land for development – that would encourage the private sector to produce more housing. That’s how we make our state better.
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Sen. John Braun of Centralia serves the 20th Legislative District, which spans parts of four counties from Yelm to Vancouver. He became Senate Republican leader in 2020.
https://chronline.com/stories/john-braun-rent-control-isnt-a-real-answer-to-the-shortage-of-affordable-rentals,373871?