This article was posted on Saturday, Sep 01, 2018

Rent control activists inLong Beach announced they were suspending signature gathering and were “developing plans” for the 2020 ballot instead.

“At this point, the coalition faces some insurmountable obstacles and the number of signatures required is too great to continue to ask volunteers to carry on in the face of some absurd opposition,” Housing Long Beach announced. 

The suspension of their efforts is a win for common sense.

While Housing Long Beach is understandably driven by concern over rising rents, their proposed solution would do more harm than good.

Good intentions don’t necessarily make for sound policy, as was recognized by a broad coalition including [apartment associations], the Long Beach Officers Association and the Long Beach Firefighters Association, all of which opposed the effort.

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Naturally, opponents of rent control inLong Beach are pleased with the announcement by rent control proponents.

“This is not a suspension, it is an admission of defeat,” said Long Beach Residents for Fair Housing Spokesman Mike Murchison. “Rent control sounds like an easy fix to rising housing costs, but this policy would have led to fewer rental units inLong Beach, deteriorating neighborhoods, and less money for essential city services.”

He’s right. One only needs to look at a place like San Francisco to see the consequences of rent control. Predictably, after the passage of rent control, landlords there pulled units from the market and rents went up elsewhere as a result. That’s probably not what rent control proponents had in mind, but that’s what happens when markets are artificially tinkered with.

As convenient a solution as rent control seems to be, the fact is rent control would only aggravateLong Beach’s housing problems. From here things get tricky, and not all rent control opponents will necessarily agree with the right way forward, but ultimately Long Beach will need to boost the supply of housing if it is to remain affordable for lower-income people.

For now, though, Long Beach remains safe from the well-intended but ultimately misguided solution of rent control.

Rent Control Isn’t the Answer to the Housing Crisis

By the Editors of the Press Telegram

In response to rising housing costs, activists across southern California have pushed for rent control. Efforts have been made this year in cities like Inglewood, Long Beach, Pasadena and Pomona to put rent control measures on the ballot.

After all, what could be a more straightforward way of dealing with rising housing costs than having the government pass laws to limit rising housing costs?

The simplicity is the appeal of rent control. It sounds like the solution people who are struggling to afford the cost of housing are looking for.

But like many policy proposals that sound too good to be true, rent control is among the most pernicious. There are trade-offs, seen and unseen consequences to every economic policy decision.

Rent control has been well-studied across the country, and the reality is while rent control might bring relief to people who live in rent controlled units, rent control policies also have a tendency to undercut housing production and in time lead to fewer rental properties overall.

Earlier this year, a working paper from the National Bureau of Economic Research assessed the impact of rent control policies inSan Francisco. While the paper found benefits to covered tenants, there were widespread negative impacts. Landlords impacted by rent control reduced their housing supply by 15 percent, which in turn caused a 5.1 percent increase in rents citywide.

Consistent with this, a January 2016 analysis of rent control in California by Beacon Economics found that the presence of rent control was associated with decreases in renter-occupied housing from 2000 to 2012 and an increase in median rents from 2000 to 2013.

“At best, the existing literature suggests that rent control laws do not accomplish their goals of increasing diversity, providing affordable housing for low-income residents, or reducing homelessness,” the report noted.

Policies like rent control, at best, provide short-term, superficial relief to those fortunate enough to be covered by rent control policies. But in the long-run, rent control policies can lead to a reduction in the supply of rent controlled units, higher rents for people in non-rent controlled units and a lower quality housing supply.

Sal Rodriguez is an editorial writer and columnist for the Southern California News Group. He may be reached at [email protected].   These articles first appeared in the Press-Telegram.