Like most far-left politicians, Sen. Bernie Sanders seems to think that government involvement will make all the problems go away. Given this fact, it’s not surprising that he has proposed a national rent control plan that forbids landlords from raising rents more than 3% — or 1.5 times the rate of inflation. However, contrary to socialist expectations, capping rents would not provide affordable housing for those who need it; rather, it would make affordable housing scarcer than ever before.
Ironically, it’s a comedian who points out one of the main problems with the national rent control plan. Hannibal Buress recently noted on Twitter that he owns a three-unit building in Chicago that he rents out via Airbnb. Buress stated that, as a property owner, he is far more concerned about the state of his property than the people he rents his property out to. It’s worth noting that this point doesn’t just apply to short-term Airbnb tenants. Even long-term tenants who love the home they happen to be living in aren’t going to be as committed to the house.
One way that landlords weed out tenants who may cause costly property damage is to raise rents so that only responsible people who care about the property can afford to live there. However, Sen. Sanders’ new law would allow careless tenants to rent costly homes and destroy them. When coupled with Rep. Alexandria Ocasio-Cortez’s recent proposals to make it extremely difficult for landlords to evict tenants, the rent control proposal would utterly destroy a landlord’s costly investment. It would also destroy home values in entire neighborhoods as one or two rowdy tenants would make life miserable for law-abiding people who will then move out.
Naturally, most landlords aren’t going to allow a socialist law to rob them of their investments. They will take measures to protect their homes and these measures aren’t going to make affordable housing widely available to the masses. Some landlords may charge a very high initial rental price since the rent can’t be raised much on an annual basis. Middle class and upper-middle-class tenants would have no problem finding a home, but those with limited financial resources would be out of luck.
Other homeowners may remove their homes from the rental market, and instead sell them while still others will only rent their homes on Airbnb instead of allowing regular tenants to move in. In any case, the end result will be that affordable housing will become scarcer than it already is. At the same time, those who are considering buying homes and then renting them out as a way to earn a living will choose another business option instead, decreasing demand for home construction and resulting in layoffs.
In short, no one wins when the government decides how much rent a landlord can charge. Unfortunately, left-wing activists are unwilling to see the obvious fact that the U.S. government can’t force businesspeople to forgo the right to turn a profit on their investments.
Granted, the cost of housing has risen exponentially in many areas. In Sen. Sanders’ own hometown, the average rent for a one-bedroom apartment is over $1,600. In Los Angeles and Manhattan, one-bedroom apartment rents are well over $2,300. However, a federal government that truly cares about providing affordable housing for the masses will find that there are alternatives to Draconian rent control laws. Changes in zoning laws, experimenting with low-cost home construction methods, or even investing in the construction of public housing are all better than forcing landlords to rent homes at a low price.
