Advocates for rent control — a policy that Richmond voters will decide upon in the November election — are similar to climate change deniers in that they ignore overwhelming consensus by experts on the issue, said Richmond Mayor Tom Butt.
In making the argument, the mayor referenced a recent San Francisco Chronicle article, “Rent control spreading to Bay Area suburbs, to economists’ dismay.”
“It has been widely reported that 97 percent of informed scientists who have an opinion agree that global warming is real and that it results from human activity,” Butt said in reaction to the article. “In a survey of respected economists, the percentage of those having an opinion that rent control doesn’t work was even higher at slightly over 97 percent.”
The discussion comes as Richmond voters face the decision Nov. 8 on whether to implement rent control and just cause for eviction policies in the city. To view the full policy proposal, go here. In brief, the proposal would cap permissible rent increases to the Consumer Price Index, which would be determined annually by a Richmond rent board. Due to state law, multifamily homes built after February 1995 and single-family homes would be exempted from rent control.
The Richmond Progressive Alliance (RPA) has been working with tenant advocacy groups for a few years to push for a rent control policy in the city. A similar policy is being considered in five other Bay Area cities amid a technology boom that has led to a housing shortage and rising rents.
While Mayor Butt believes increasing the housing supply is a better way to address rising rents, tenant advocates believe that isn’t enough. They say rent control is required to keep low-income residents from being displaced from their homes.
But groups like the RPA have both ignored and denied warnings by a vast majority of economists that rent control is a failed policy.
“The concept of rent control, once found mostly in large cities, is spreading to the Bay Area’s suburbs, even though virtually every economist thinks it’s a bad idea,” the Chronicle’s article states.
The policy hasn’t been adopted by another jurisdiction in decades, and it hasn’t worked to prevent skyrocketing rents in the cities that currently employ it, including San Francisco, Oakland and Berkeley, critics point out.
Economists also say the policy discourages landlords from investing in improvements on their properties, potentially leading to blight.
In 2013, Peter Tatian of the Urban Institute found “very little evidence that rent control is a good policy,” according to the Chronicle. He found a comprehensive survey stating “tenants in noncontrolled units pay higher rents than they would without the presence of rent control; one reason being that landlords need to make up the difference for lower rents in controlled units.”
Also, rent control protects high earners as well as low earners, since “you can be making $150,000 a year” and decide never to leave your rent controlled unit.
“All of a sudden there is no trickle effect. No working-class family will ever get that unit,” Thomas Bannon, CEO of the California Apartment Association, was quoted as saying in the Chronicle.
The newspaper also referenced a 2012 survey of economists by the University of Chicago’s Booth School of Business. Asked if they agreed that rent-control in cities like New York and San Francisco have improved the quantity and quality of affordable rental housing over three decades, 81-percent of surveyed economists disagreed, 2-percent agreed and 9-percent were uncertain or had no opinion.
That, however, hasn’t changed minds among rent control advocates. At Tuesday’s Richmond City Council meeting, the RPA and fellow advocates will attempt to pass a moratorium on evictions and “high” rent increases until voters decide on their policy proposal in November. Butt says the proposed moratorium will most likely fail due to a lack of votes.
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