This month, the Los Angeles City Council decided the city\u2019s longstanding rent control policy needed changes.<\/p>\n
No, they didn\u2019t do the smart thing and decide to eliminate rent control. Instead, they proposed updates that will only make a bad policy worse.<\/p>\n
While property owners subject to the city\u2019s Rent Stabilization Ordinance are allowed to raise rents 3% annually or higher depending on inflation, the new policy sets tighter caps on rents.<\/p>\n
As reported by LAist, under the plan approved by 12 of the 15 councilmembers \u201crent increases would be capped at 4% annually, and an additional 2% increase for landlords who cover utilities would be eliminated.\u201d<\/p>\n
\u201cExtraordinary rent increases are driving people out of the city,\u201d said democratic socialist Councilmember Nithya Raman to justify the action.<\/p>\n
Raman might want to reflect on the reality that the city has had rent contol on the books for decades and the city\u2019s housing affordability problem has only gotten worse.<\/p>\n
It\u2019s as though artificial constraints by government on the rental market deter suppliers of rental housing from entering the market and even prompts many to exit it.<\/p>\n
Who knew?<\/p>\n
If the Los Angeles City Council cracked open an Economics 101 textbook they\u2019d know this. Or, they could just Google it.<\/p>\n
Research published by the National Bureau of Economic Research in 2018 found that rent control in San Francisco resulted in reduced rental housing supply and as a result of that reduced supply pressed prices up in units that remained on the market.<\/p>\n
Indeed, as Swedish economist Assar Lindbeck famously said, \u201cIn many cases rent control appears to be the most efficient technique presently known to destroy a city \u2014 except for bombing.\u201d<\/p>\n
If Los Angeles or other California cities like Pasadena going down the delusional path of control want to fix their housing markets, it\u2019s not complicated: Legalize more housing in more parts of the city and abolish barriers to more housing like rent control and Measure ULA (in Los Angeles).<\/p>\n
If you want affordable housing, let more housing get built. Housing is subject to the same basics of supply and demand as anything else.<\/p>\n","protected":false},"excerpt":{"rendered":"This month, the Los Angeles City Council decided the city\u2019s longstanding rent control policy needed changes. No, they…\n","protected":false},"author":3,"featured_media":408735,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5123],"tags":[1582,276,6083,2961,224,5337,1269],"class_list":{"0":"post-409126","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-los-angeles","8":"tag-ca","9":"tag-california","10":"tag-editorials","11":"tag-la","12":"tag-los-angeles","13":"tag-losangeles","14":"tag-opinion"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/115623639819000710","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/409126","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=409126"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/409126\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/408735"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=409126"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=409126"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=409126"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}