Rent control, on the surface, appears to be a well-intentioned approach. By capping rent increases, policymakers aim to shield tenants from rapidly rising housing costs. In many cities across the U.S., particularly in high-demand urban areas, rent increases have outpaced income growth, making it harder for renters to keep up. It’s a serious issue that needs to be addressed, but rent control could lead to unintended consequences that hurt both tenants and landlords over time.

A major concern, as noted by the American Institute for Economic Research (AIER), is that rent control policies often disincentivize landlords from maintaining and improving their properties. When rental income is capped, property owners may find themselves unable to justify or afford costly maintenance, renovations, or upgrades. Over time, this can lead to a decline in the quality of rental housing. Renters may find themselves living in properties that are increasingly outdated, poorly maintained, or unsafe.

This isn’t just a hypothetical scenario. In cities where rent control policies have been in place for decades, like New York and San Francisco, we’ve seen many examples of older buildings falling into disrepair due to limited resources for upkeep. Tenants, who are initially the beneficiaries of rent control, end up living in lower-quality housing. In fact, some landlords are forced to leave units vacant or convert them into other types of properties to avoid the constraints of rent control.

In addition to the impact on existing housing stock, rent control can also stifle the development of new rental properties. The real estate market operates on the principle of supply and demand. When rental income is limited, developers are less likely to invest in building new rental units, especially in markets with strict rent control regulations. Fewer new developments mean less housing supply overall, which puts upward pressure on rents for the remaining units on the market. This is particularly concerning in regions already facing housing shortages, where demand far outstrips supply.

The National Apartment Association (NAA), a trade organization representing rental housing providers, has voiced similar concerns. They argue that rent control policies may drive many property owners and developers out of the market, reducing the availability of rental housing. This would lead to the exact opposite of what rent control intends—rather than making housing more affordable, it could shrink the market, increase competition for available units, and push prices higher.

Rather than resorting to rent control, a more comprehensive approach is needed to address the root causes of housing affordability. At its core, the affordability crisis stems from a significant supply-demand imbalance. To create a sustainable solution, policymakers should focus on increasing the supply of affordable housing. This can be done through a combination of zoning reforms, incentives for developers, and public-private partnerships. By making it easier and more cost-effective to build new housing, we can increase the overall stock of rental units, which will naturally help stabilize rents through market forces.

Reducing Regulatory Barriers

In many cities, the process of getting approval for new developments is bogged down by red tape, lengthy approval processes, and costly compliance requirements. Reducing regulatory barriers is  critical for housing supply. Streamlining these processes could help bring more housing units to market more quickly, providing relief to renters without the need for restrictive policies like rent control.

Community Development Investments

Investing in community development initiatives is another strategy that can support long-term housing affordability. By focusing on revitalizing underdeveloped areas, improving local infrastructure, and creating more opportunities for employment and education, we can make it more viable for people to live in a broader range of neighborhoods. This would alleviate some of the demand pressure on high-cost urban areas, giving renters more options at a range of price points.

Conclusion

Rent control, while motivated by a desire to help tenants, may create more harm than good in the long run. It risks lowering the quality of housing and discouraging investment in new developments. Instead of focusing on short-term fixes, policymakers should pursue strategies that address the underlying supply and demand issues, encourage responsible development, and invest in long-term community growth. By doing so, we can build a housing market that benefits renters, property owners, and communities alike—one that promotes affordability, equity, and growth for all.

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