The fact that wages have been stagnating for over several decades should not come as a surprise to anyone who has been alive for more than one of them. However, as populations slowly increase and inflation drives up the overall cost of living, rents and property values have soared above inflation rates and increased disproportionately to wage increases. According to a Harvard study, this is one of the key factors driving what some are now calling a crisis of affordable housing. The driving forces between the oncoming crisis appear to be limited in number but nonetheless significant: First, it’s simply not affordable to build low-cost housing. Especially with recent Trump administration tariffs on basic building materials like steel and aluminum, construction companies need to seek out higher-value property contracts in order to continue turning profits. Second, as the population ages and gentrification continues, people are moving less and staying put more, which, combined with a downturn in construction of new houses and building units, usually leads to replacement instead of new construction – low-rent apartment complexes are torn down and replaced with expensive condominiums, further compounding the issue.
This dynamic creates significant tension between renters and property owners, both of whom simply want a fair deal in an already fraught real estate climate. Many agree that a change in policy is necessary, but few are able to forge agreement across the aisle concerning exactly which policies need to be changed and to what degree. First among the most hotly and contentiously debated policies is rent control, a government regulation that would cap rental prices at a nominal maximum value. This policy has its detractors and supporters, both staunchly opposed to any contradictory opinions or evidence.
Supporters of rent control cite the statistics that show a widening gap between wages and rental costs, as well as the potential for abuse on the part of property owners. A secondary element of rent control policy that is frequently overlooked in public debate is more comprehensive legal protection for renters, giving them the right to be notified of rent increases in a timely manner or giving them recourse against unlawful evictions. As it stands, if a property owner sees an opportunity to cater to a wealthier market segment, it’s fairly easy for them to force out current tenants either through evictions or rent increases and convert the properties into condominiums or display homes.
On the other side, opponents of rent control (when they’re not parroting the exhausting “grow up and learn how the world works” narrative that has come to underpin many conservative talking points of late) correctly point out that what is potentially the biggest issue driving the housing crisis is the gap between the need for housing and the amount of housing available, and even the most ingenious rent control measures would not magically produce a surplus of housing. The ubiquitous supply-side rhetoric is of course present here: rent control would hurt property owners and potentially further drive down housing availability, which is certainly possible. It’s hard to believe, however, that a middle ground can’t be established wherein vulnerable low-income families can be protected from predatory rent hikes and property owners can still find ways to turn profits on their buildings. In fact, upon closer inspection, many anti-rent-control op-eds appear to be written by people such as founding partners of Kiser Group, a massive Chicago real estate brokerage firm, or the Washington Legal Foundation, a conservative legal action group with ties to notoriously pro-business right-wing think tanks. Kiser conjures images of aging couples using rental properties as a retirement nest egg, barely managing to break even while fighting an uphill battle against pernicious government regulations preventing them from recouping their investment. In reality, many properties are sold for tens of millions of dollars, with one property being sold for almost four times the cost of purchasing the individual condominiums in the building. However, many properties, while still in the six-figure region, are significantly cheaper, and when tenants can barely afford to pay their rent and other units sit empty, it can make things difficult for lower-end property owners, especially when the building is in need of repairs or utility prices inevitably increase. The share of high-income to low-income property owners, however, is incredibly difficult to determine through publicly available data.
If this sounds familiar, it’s because it is. The class divide narrative that has come to play a significant role in politics over the last several years has begun to seep into many different policy debates on both the local and national level. Opponents of rent control see their opponents as out of touch and idealistic, while supporters of rent control see the other side as representing a greedy, moneyed elite, robber-barons who put profits over humanitarian needs. As it stands, something perhaps similar to rent control could be beneficial to both sides, but the most pressing need seems to be one of the most ignored: in order to pay rent, people first need a place to live.