Controlled local rent cripples housing development, says BAHN
The Business and Housing Network (BAHN) critiques the State’s “draconian” Housing Element policies in their latest letter. While purportedly designed to “provide opportunities for (and do not unduly constrain) housing development,” BAHN points out that California’s rent control laws—mirrored in cities like SJ—severely inhibit housing providers and offerings. To receive daily updates of new Opp Now stories, click here.
Data and economists consistently show that rent and building restrictions destroy the housing supply and hurt housing providers and renters alike at same time (see links below). Yet, the current housing element packet perpetrates and turns a blind eye on such failures:
• Rent control distorts the rental prices and pits one group of renters to subsidize another.
• It completely disregards property owners as laborers who deserve fair compensation to support their families’ livelihoods and keep up with the costs associated with properly maintaining their properties.
• The forced income/cost deficits destroy the rental housing entrepreneurships, resulting in shrinking housing offerings, increased competition among renters for the limited housing availability, forced frontloading of higher rents by the surviving housing providers and reduced rental housing construction.
• Many housing policies nullify the mutual contractual terms between an housing provider and their tenant clients, resulting in tremendous legal and financial uncertainty for housing providers, especially for the mom-and-pop and frail seniors with limited education, language skills or mobility, which undermine their control over their relations with their tenants.
• This government-induced disrespect for property rights results in increased bad tenant behaviors and problems for the safety and enjoyment of the community. The exorbitant legal costs and disputes only add to government/owner/renter financial and social woes.
• To see the deterioration of housing affordability and the quality of life under these horrific rent control and “tenant protection” laws, look no further than the infamous New York City, San Francisco, East Palo Alto, Oakland and newly extreme-rent-controlled St. Paul, where housing constructions have dwindled.
As one can see, the proliferating draconian "tenant protection" and rent control policies do not work. California must start respecting the basic economics that every housing regulation or fee adds to the base cost and thus rent…
To request a copy of the whole letter, contact the Business and Housing Network at bahn.org@gmail.com.
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