A pair of Seattle City Councilmembers have introduced a rent control resolution. Currently, state law preempts local governments from imposing rent controls, but the idea has gained some local support. Backers include many who supported the $15 minimum wage and now see rent control as a logical next step.
Today, Seattle Times business columnist Jon Talton weighs in on the issue.
The biggest risk for Seattle is that developers go elsewhere, such as the Eastside or Austin. Lesser Seattle fans might cheer until they realize these capitalists provide a big chunk of the funding for City Council’s pet progressive projects and “the neighborhoods.” A companion danger is that the response — and this is especially true of rent control — actually reduces affordable housing or incentives to build.
There’s an overwhelming consensus among economists that rent control reduces the quality and quantity of housing. Talton observes that rent control represents a much larger gamble than did the minimum wage hike.
… endangering the larger business climate, which a heavy hand against developers would mean, is very different from the $15 campaign. The first people hurt would be the working poor.
New York City serves as an instructive, bad example. Walter Russell Mead writes in The American Interest of NYC Mayor Bill de Blasio’s efforts to get legislative approval of tougher rent control regulations. He says,
Rent control was one of the worst ideas of postwar New York City, where over the decades it led to the decay of whole neighborhoods in the greater NYC area. One million housing units are still under rent control, but a gradual easing of the system in recent decades has been a major contributor to the long boom that has transformed New York, and made it a much safer and more prosperous place.
It’s likely, he says, that the legislature will reject the mayor’s agenda.
As Seattle considers housing affordability, a worthy goal for a city confronting income inequality and rapid gentrification, policymakers can learn from the unhappy experience of NYC.