Recently, Edward Goetz, an award-winning professor of urban and regional planning and director of Center for Urban and Regional Affairs at the University of Minnesota, wrote an important op-ed for the Boston Globe. In it, he explains how rent stabilization is an “effective approach” to deal with the housing affordability crisis, and why the real estate industry’s anti-rent control arguments are flat-out wrong.
“Too often,” Goetz wrote, “opponents of rent stabilization make their arguments based on what they think will happen, without looking at what actually has happened.”
We couldn’t agree more, and we’d take it one step further: real estate industry insiders, including top YIMBYs, know that they’re lying about rent regulations.
Goetz wrote the piece in response to the Providence City Council’s consideration of a rent stabilization ordinance. Like many other cities across the United States, skyrocketing rents in Providence, Rhode Island, are slamming poor and middle- and working-class tenants, who routinely spend more than 30 percent of their paychecks on rent, which has life-threatening consequences.
Eviction Lab, the prestigious think tank at Princeton University, found that unaffordable rents are linked to higher mortality rates. And a wide-ranging UC San Francisco study found that people end up homeless because of sky-high rents. On top of that, The Guardian found that increasing numbers of unhoused Americans have died on the streets in many U.S. urban areas.
With so much on the line, Goetz’s op-ed is timely and needed.
“City officials [in Providence] are responding to the crisis with a proposal to enact rent stabilization,” the respected professor wrote. “Vocal critics of the policy make a wide range of doomsday predictions about what will happen if a city adopts it. But the actual record of rent stabilization across the country tells a dramatically different story. In fact, rent stabilization can be an effective approach to the affordability challenges faced by Providence renters, as it has been in other U.S. cities.”
Sounding a note often made by housing justice activists, Goetz further wrote: “What accounts for the discrepancy between what the critics say about rent stabilization and its reality? The self-interest of the [real estate] industry in remaining unregulated is part of the story, but so is the tendency to react to rent stabilization on the basis of simplified economic theory rather than looking at how it actually operates.”
He noted that rent stabilization consistently shows that it creates stable, affordable housing for tenants and slows down dramatic rent hikes. It also reduces rents for the long term, as long as the policy controls rent increases when a tenant vacates an apartment and a new tenant moves in.
Notably, Goetz strikes down a regular argument made by the real estate industry and YIMBYs – that rent regulations harm housing production.
“The research also shows that rent stabilization does not cause the problems that critics sometimes associate with it,” the professor wrote. “In fact, no study, anywhere in the country, has shown a decline in new construction as a result of rent stabilization.”
Studies by the University of Southern California and UC Berkeley found the same thing.
Why is that the case? Goetz noted that most rent stabilization ordinances exempt new construction for a number of years, allowing developers and landlords to charge market-rate prices for those units.
The professor also wrote that “worries that rent stabilization will lead to the decline of the housing stock are also largely unfounded.”
Goetz wrote: “Research has shown that large maintenance items and building systems do not suffer in cities with rent stabilization. That is likely due to the fact that all rent stabilization programs, like the one proposed for Providence, include a provision whereby landlords can be exempted if they can demonstrate that the cap does not allow them a reasonable rate of return.”
Goetz also brought up a point that Housing Is A Human Right often makes: “While rent stabilization does not produce the doomsday outcomes critics attribute to it, neither is it a panacea.”
Like Housing Is A Human Right, the professor urges a multi-pronged approach that’s very similar to what we call the “3 Ps”: protect tenants through rent regulations and other protections; preserve existing affordable housing; and produce new affordable and homeless housing through such concepts as adaptive reuse and pre-fabricated housing.
“To best meet the challenges facing the city,” Goetz wrote, “rent stabilization, affordable housing preservation, and new housing production need to be pursued together.”
Politicians must step up and implement the 3 Ps.
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