For the first time in decades, a presidential candidate is pushing for nationwide rent control.
Democratic contender Bernie Sanders unveiled the key points of his $2.5 trillion housing plan on Saturday, calling for national rent control standards as well as the investment of billions of dollars to end homelessness, overhaul public housing, create mixed-income housing and establish community land trusts across the country.
The release of Sanders’ plan, which is expected to be rolled out in full over the next couple of weeks, could mark a shift in how housing is discussed in the lead up to the 2020 presidential election. Candidates Elizabeth Warren and Julián Castro already released their own housing plans with little fanfare, and during the last Democratic debate, no questions were asked about affordable housing.
But the prospect of establishing nationwide rent control fuels a growing trend in the U.S., which some attribute to a demographic expansion of renters in the past decade and a return of class politics. Though rent control largely fell out of favor after the 1950s, with more than 30 states explicitly banning it, the policy has experienced a recent resurgence. California is poised to implement a statewide cap on annual rent increases just a few months after Oregon approved its own statewide limit. New York just expanded its protections of rent stabilized tenants, stopping short of a rent cap, which is expected to be on the table in some form the next legislative session.
Sanders’ plan would limit rent increases to one and a half times the rate of inflation or 3 percent, whichever is higher. A representative for Sanders’ campaign declined to comment further.
Rent control, Sanders style
Sanders’ first attempts to enact rent control as mayor of Burlington, Vermont, failed. Although he was elected in 1981 on a platform of expanding tenants’ rights, measures to enact a tax on rental property speculation and apartment registration were scuttled by the city council, and rent control was voted down in a referendum in 1982. In 1989 the progressive senator’s “just cause” eviction bill was rejected by Burlington voters.
After this “failed foray into rent control,” according to John Davis, co-founder of Burlington Associates in Community Development, “[Bernie] learned from this defeat and moved on, adopting a progressive, multi-faceted housing agenda that did not rely on governmental control of rents.”
Economists and landlords argue that rent control hurts existing housing stock and cools new development. Lawrence White, an economics professor at New York University, said cities should instead focus on easing land-use restrictions to encourage the construction of housing.
“I can see the political attractiveness [of rent control]. There are a lot more tenants than there are landlords out there,” he said. “But it’s just a horrible way of trying to deal with any housing problems.”
He questioned the viability of finding rules that make sense for the whole country.
“Gee, how do you establish rules that apply to Missoula, Montana, to Center City, Philadelphia, to Tampa, Florida, let alone Queens and Brooklyn?” he said. “We have great difficulty administering a rent control program in New York City. I can’t imagine doing it on a nationwide basis. It’s just chaos.”
Lawrence Yun, chief economist with the National Association of Realtors, agreed that “rent control would be a terrible solution” to the affordable housing crisis, adding that it would deter landlords from maintaining existing housing stock.
Roosevelt Institute fellow and CUNY assistant professor of economics J. W. Mason attributes vehement opposition to rent control to an analysis that ignores the significant social and economic benefits of people remaining in their homes.
“It’s practically the first thing you see in an economics textbook: the diagram of losses due to rent control,” Mason said. But the Marxist scholar disagrees with convention. Rising market rents are not attributable to buildings getting better, Mason said, but to the surrounding neighborhood becoming more desirable.
“Rents are a payment for a monopoly due to a legal right, not because of a contribution to production,” he said. “And rent-regulated housing stock in places like New York City and San Francisco is very old.”
A bet on community land trusts
Sanders’ plan also calls for the creation of 2 million units of mixed-income housing and $50 billion in grants to fund the creation of community land trusts (CLTs), in which nonprofits acquire land in order to operate affordable housing on a permanent basis. Sanders helped secure initial funding for a community land trust in Burlington when he was mayor in 1984. That trust — the Burlington Community Land Trust — eventually merged with another to form the Champlain Housing Trust, which is now the largest of its kind in the country.
Nixon Peabody’s Erica Buckley said an infusion of capital on the national level could go a long way in sparking interest in CLTs and getting local governments more comfortable with the model. Cooper Square, New York’s first and most prominent CLT, was formed in 1991, evolving from the neighborhood’s previous efforts to protect itself from Robert Moses’ “slum-clearance” project. Even in New York, where the concept has gained traction in recent years, hurdles remain in the form of funding and local approvals.
Buckley, who previously headed the state Attorney General Office’s Real Estate Finance Bureau, said she’s worked with the Department of Housing Preservation and Development for more than two years to figure out an acceptable ground lease deal for the Interboro Community Land Trust. The AG’s office has set aside funding for CLTs in the past, most recently pledging $8 million in February toward expanding local ones. But more funding sources are necessary, she said.
“While [CLTs] are great — they remove housing from the speculative marketplace — people also think they solve all sorts of problems that they don’t,” Buckley said. “It doesn’t magically create subsidies.”