Does Rent Control Work?

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Governor Newsom says yes when asked “Does Rent Control Work”?

As we close out 2019 Governor Gavin Newsom adds rent control to the laws that originated in San Francisco and now regulate the entire state. The governor and other supporters of the law believe that rising rents are increasing the number of homeless across the state of California. They blame the landlords for problem but are they?

Since the beginning of time there have been homeless people. As the industrial age expanded and the United States expanded west, it was common for people to find a way to where the new jobs, land or other opportunity were. The gold rush in California brought thousands of people here looking for riches.

In 1864 the first Chinese team immigrated to the United States to build the rail systems. The construction of the railroads let to the opening of the immigration floodgates for cheap Chinese labor to move for a better life. As we look at the history of labor camps on the railroads, it is hard to believe the Chinese would cram into a ship, sail across the pacific to live in those conditions. Somehow the labor camps were an improvement on the conditions in China.

So what does all of this have to do with rent control and figuring out if it really works? When the Chinese came to the US they were looking for a better deal, not cheaper rent.

When a rent control proponent says that the increase in rent cause someone to leave a home and live on the street, they fail to acknowledge that there is another person or family standing outside ready to pay the rent. No landlord wants empty homes. So what happens to those people?

Rent control simply stops progress, and that is the root of the problem that leads to homelessness. When progress stops, growth stops, and when growth stops, death starts.

People are driven to survive. In 1943 Abraham Maslow studied the human condition and found that our instinct and humanity causes us to live with a hierarchy of needs. At the base the most important need is Survival. Simply staying alive is our most important need.

Just above that is property and employment. With rent control the politicians are effectively saying. You can stay put in your job, and stay put in your home. You don’t need to change with the times. The problem is the times will change, other costs will go up and the problem continues with or without rent control.

So does rent control work? I think if you look at the data and follow the money you will find the real answer is no. It is simply another pacifier offered by a government that no one really needs.

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