Housing advocates frequently claim that the rent is too damn high. (From 2005 to 2015, there was even a political party in New York that focused on this single issue.) While it can be easy to empathize with that sentiment, housing advocates share much of the blame.
Under the guise of “tenants’ rights” advocates propose a litany of policies that ultimately add to the cost of rental housing. Unable to see the forest for the trees, advocates look at issues in isolation and fail to recognize the principles involved.
The latest example comes from Denver. Denver’s city council recently passed an ordinance that includes the licensing of landlords. While the licensing fee is modest (it ranges from $50 to $500), other provisions in the ordinance will likely prove to be much more costly.
For example, one provision in the ordinance requires landlords to have properties inspected by a certified, private home inspector. The cost of an inspection is $300 to $600 in Denver. And, while the property owner may pay the inspector, that cost, along with all of the other costs that licensing will impose, will ultimately be passed on to renters.
As another example, the councilwoman who sponsored the ordinance addressed frequently asked questions about the law. In that document, she states that licensing is recommended by the Denver Department of Public Health and Environment to help combat climate change through “energy efficiency measures.” We can be almost certain that the city council will eventually force landlords to increase the energy efficiency of their properties—another expense that will be reflected in the rents.
Not surprisingly, landlords opposed the licensing requirement. They correctly noted that the ordinance will add more bureaucratic red tape into their business and the inspections could lead to expensive, albeit unnecessary, maintenance costs. Many tenants also opposed the licensing ordinance because of the potential for increased rents.
At a time when Denver, along with nearly every city in the nation, has a severe shortage of affordable housing, adding to housing costs is only going to exacerbate the situation. And so, while screaming “the rent is too damn high” out one side of their mouth, they demand more controls and restrictions on housing producers out the other side. If housing advocates are truly looking for a reason that the rent is too damn high, a good place to start would be the mirror.