In my book, The Affordable Housing Crisis: Causes and Cures, I show how a century of policies attempting to provide affordable housing have failed. Indeed, those policies have made the housing crisis worse. Yet, politicians and housing activists clamor for more of the same policies. The wrong framework leads to bad decisions.
Minneapolis provides us with a recent example. In 2021, voters directed the city council to draft a rent control ordinance. At the same time, voters in St. Paul approved one of the nation’s most stringent rent control laws. Not surprisingly, investors began pulling out of St. Paul’s rental market. But this hasn’t stopped the Minneapolis city council or housing activists. Despite a report from a city staff that recommended against rent control, the council is moving forward with a law that it hopes to submit to voters this November.
One housing advocate said that claims that rent control would harm the housing market are scare tactics. He went on to say that
he knows people will pull out of Minneapolis if rent control in its strictest form is established and development will stall in the short term. Long term? He thinks people will keep building.
Given that every city with rent control experiences a long-term decline in both the quality and quantity of rental housing, the activist’s contention is nothing more than wishful thinking.
The Progressive Regressive framework that rent control advocates embrace is unconcerned with the full context, including long-term consequences of a policy. Instead, that framework demands that one look only at the immediate benefits. It demands that one consider a policy in isolation, refusing to identify the impact on other issues.
This framework explains why rent control is gaining in popularity across the nation. Rent control does provide short-term benefits to some renters. The long-term harm to all renters, which has been well documented, is ignored.
Albert Einstein said, “We can’t solve problems by using the same kind of thinking we used when we created them.” The wrong framework has caused the housing crisis. It’s continued application has made the problem worse. If we truly want to solve the affordable housing crisis, we need a new framework for housing policy.