rent control

Do You Know What Chicago Doesn’t Need?

Swedish economist and socialist Assar Lindbeck commented years ago that, “In many cases rent control appears to be the most efficient technique presently known to destroy a city—except for bombing.”

Rent Control.

From the Chicago Reader:

Public interest and enthusiasm for abolishing Illinois’s prohibition on rent control is growing. In Bronzeville last Thursday night, a crowd of around 200 people packed a church auditorium to hear presentations organized by the Lift the Ban Coalition. The group of 20 community groups has formed in recent months to push for a repeal of the state’s 1997 Rent Control Preemption Act and subsequently lobby for a rent regulation ordinance in Chicago. The coalition has been picking up steam since rolling out its campaign in Pilsen earlier this month; it plans to collect signatures to get a referendum to repeal the state prohibition on the March primary ballot.

“A landlord should not be able to go up on the rent as much as he or she wants to,” Roderick Wilson of Lugenia Burns Hope Center, a Bronzeville-based community development and leadership organization, declared to the crowd before the panel discussion. “There should be regulation on how much he raises the rent. Y’all with me?”

A roar of “Yeah!” and thunderous applause echoed through the room.

In between testimonials from north-, south-, and west-siders, who spoke about their experiences being displaced or evicted, attorneys from New York City and San Francisco’s Bay Area spoke about the history and effects of rent regulation laws in their communities.

Timothy Collins formerly served as the executive director of New York’s Rent Guidelines Board, which oversees a million rent stabilized apartments. He warned that proponents of rent regulation typically face a plethora of arguments from real estate interests that don’t hold much water. Take a look, Collins said, at seven decades of regulation in the country’s largest rental market.

“[Opponents] are gonna tell you that landlords will disinvest, they’re gonna leave the city,” Collins cautioned the crowd, “that you’re gonna see underutilization where rents are priced so low that one person will keep a big apartment and have three bedrooms to rattle around. And they’re gonna tell you that maintenance is gonna collapse, because [landlords] won’t be able to afford it.”

But, he went on, “none of the real estate interests’ dire predictions have come true” in New York, where the real estate business is booming despite half the rental housing being under some form of rent regulation, where the highest rental vacancy and underutilization rates are in unregulated apartments. “The housing stock,” Collins said, “has never, ever been in better condition.”

Marc Janowitz, the attorney from Oakland, California, highlighted that rent regulation is one of two legal strategies that must work in tandem to counteract gentrification and displacement. The other is what’s known as a “just cause eviction law.” Currently in Chicago, landlords can terminate a month-to-month rental agreement or a lease-based tenancy (when the lease expires) at will, even if a tenant has paid rent consistently and hasn’t committed any violations.

“When a landlord doesn’t have to have a reason, the reason is never no reason—the reason is more money!” Janowitz said. He explained that the ramifications of no-cause eviction laws are particularly palpable in areas where the value of rental housing suddenly increases and landlords decide they can charge much more than current tenants are paying.

Rent Control isn’t the God Send people pretend it is

When a city government imposes rent control, it means the city makes it illegal for landlords to charge tenants rent above a ceiling price. Sometimes that price can vary, but only on specified factors. For the law to have any teeth — and for the politicians who passed it to curry favor with the public — the maximum rent-controlled price will be significantly lower than the free-market price.

Rent controls are exactly like any other form of price control. If you set the price above the market price, as we’ve been doing with farming for decades, then we’ll get a glut. If we set the price below that market price (as has always been true of rent controls, always, everywhere) then we’ll get a shortage. And that shortage will come about in two ways. Less new building than otherwise will take place and extant building will not be maintained leading to appalling tragedies like this one.

Isn’t this exactly what Illinois needs right now?  I’m sure that this wonderful policy has worked everywhere else!  Instead of blindly following New York and California into the abyss, maybe we should take one look at the actual consequences of their disastrous policies and just say NO.