basquebromance
Diamond Member
- Nov 26, 2015
- 109,396
- 27,011
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- Banned
- #1
Oregon lawmakers propose unorthodox approach to rent control
Those people already in existing units would likely see a short-term reduction in rent hikes. But those benefits come at the expense of everyone else and will leave many unable to find housing at all, exacerbating the city's housing crunch.
Capping rents slashes the incentive to build more housing. If rents are high and landlords know this, then putting more units on the market is profitable. Ultimately, that means more units are available, which drives down prices as landlords compete to attract tenants. But by imposing rent controls, the state cuts off that market process, leading to fewer new units and an even worse long-term housing shortage.
But the problems don’t stop there. Capping rents also means that tenants are unlikely to ever move — after all, if you’re paying well below market rate for a unit, why would you ever give it up? That means there is little housing turnover and that even as people earn more they’ll stay in their unit, likely because there a few other options in a tight market. That limits the availability of more affordable housing.
For lawmakers serious about addressing Portland’s housing crisis, there is, of course, a solution: pushing for more housing. Although that might require re-thinking land use regulations and lacks the feel-good simplicity of promising lower rents, in the long term that is the only solution to a housing shortage which is the root cause of high rents.
Those people already in existing units would likely see a short-term reduction in rent hikes. But those benefits come at the expense of everyone else and will leave many unable to find housing at all, exacerbating the city's housing crunch.
Capping rents slashes the incentive to build more housing. If rents are high and landlords know this, then putting more units on the market is profitable. Ultimately, that means more units are available, which drives down prices as landlords compete to attract tenants. But by imposing rent controls, the state cuts off that market process, leading to fewer new units and an even worse long-term housing shortage.
But the problems don’t stop there. Capping rents also means that tenants are unlikely to ever move — after all, if you’re paying well below market rate for a unit, why would you ever give it up? That means there is little housing turnover and that even as people earn more they’ll stay in their unit, likely because there a few other options in a tight market. That limits the availability of more affordable housing.
For lawmakers serious about addressing Portland’s housing crisis, there is, of course, a solution: pushing for more housing. Although that might require re-thinking land use regulations and lacks the feel-good simplicity of promising lower rents, in the long term that is the only solution to a housing shortage which is the root cause of high rents.
