In December 2022, the typical monthly rent in the United States was $1,981 – an increase of 7.4% from the previous year. But while rents have begun to stabilize nationwide, it is difficult for many Americans to afford rent.
According to Leah Simon-Weisberg, an assistant professor of law at UC San Francisco, “there is nowhere in the country where a tenant is not burdened with their rent.”
In response, support for rent control policies has gained traction.
But this is not the first time such policies have found widespread support. Following the massive economic disruption caused by World War II, the federal government imposed rent controls on approximately 80% of rental housing between 1941 and 1964.
Over time, it was abandoned as leading economists unanimously argued against the policy. That sentiment mostly continues today.
Jay Parsons, chief economist at RealPages, said, “There are several polls of economists. One conducted by IMG showed that only 2% thought rent controls were having a positive effect on affordable housing in places like New York and San Francisco.”
Economists argue that rent controls will prevent developers from building more homes, which will only worsen the housing supply crisis in the United States.
According to Habitat for Humanity, America already suffers from a shortage of 3.8 million homes, particularly at low-income price points.
“We as a nation have not invested in building a supply of housing at various price points, in various communities. Instead we have relied on the private sector to do so,” said Sharon Wilson Geno, president. National Multidimensional Housing Council. “But until that money comes into the market and investors see it as a better investment than any other type of equity or any other type of investment, they’re not going to come.”
see Video Read on to find out why so many economists are against the idea of comprehensive rent control.
Orignal Post From: Why rent control won’t solve the issue of high rents in America