On Tuesday, Americans for Tax Reform (ATR), the Heritage Foundation, and over 30 other conservative groups announced their opposition to Vice President Kamala Harris's rent control proposal, Americabrief has learned exclusively.
In mid-August, Harris introduced a proposal similar to President Joe Biden’s, aiming to cap rent increases at five percent nationwide over the next two years for landlords owning more than 50 units.
In a letter obtained by Breitbart News, the conservative groups warned congressional lawmakers and state attorneys general that the rent control proposal would cause more harm than good, significantly reducing the supply of affordable rental housing in many cities
The coalition stated, “Even the socialist Swedish economist Assar Lindbeck once said, ‘In many cases, rent control appears to be the most efficient technique presently known to destroy a city — except for bombing.’”The letter also highlighted that San Francisco, California, had already attempted a similar proposal to the one Harris is advocating for, with disastrous results
Nationwide rent control and increased restrictions on housing providers would likely lead to a sharp decline in new housing developments, the conversion of affordable rentals into Airbnbs or condominiums, and the denial of housing to millions of higher-risk tenants, potentially exacerbating homelessness in cities. These measures could also drive overall rent prices higher.
A study by the National Bureau of Economic Research (NBER) found that the expansion of rent control in San Francisco in 1994 led many landlords to convert their properties into condominiums or tenancies in common. Rather than promoting affordable housing, these policies incentivized the conversion of rental properties away from such uses.
The study also found that rent control resulted in a city-wide rent price increase of 5.1 percent. Lower rents for existing tenants often led them to stay in their apartments longer than they might otherwise, reducing the availability of rent-controlled properties for new tenants and driving up prices for non-controlled units.
The coalition also pointed to the case of Cambridge, Massachusetts, where the abolition of rent control led to a doubling of direct investments in housing units within just a few years.
Additionally, they cited a study that found doubling the number of rent-controlled units in an urban area resulted in a 16.2 percent increase in severely inadequate housing and a 14.7 percent increase in moderately inadequate housing.
As John Carney and Alex Marlow of Breitbart News wrote in the Breitbart Business Digest in July, such rent control proposals are not serious attempts to pass legislation through Congress but are instead political maneuvers aimed at gaining voter support:
"Fortunately, this proposal is unlikely to become law. Tax depreciation schedules are fixed by statute, meaning Congress would have to pass Biden’s national rent-control plan."
The authors argued that the proposal is a cynical attempt by the Biden administration to appeal to renters who feel burdened by housing inflation caused by current policies, rather than a genuine policy initiative.
In their letter to congressional lawmakers and state attorneys general, the conservatives concluded, “Nationwide rent control and price controls, like banning pricing algorithms, will further inflate housing costs. Despite substantial evidence against the use of price controls, politicians often promise voters they can lower prices without consequences. We urge lawmakers and state attorneys general to oppose and fight these dangerous efforts in the housing industry.”
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