Rent-Stabilization Laws Are Essential for Protecting Tenants, Say Experts
Last fall, Brian Callaci and Sandeep Vaheesan, of the Open Markets Institute, wrote a must-read white paper on ways to solve the housing affordability crisis. Published in the Harvard Business Review, it made clear that rent-stabilization laws are crucial for protecting tenants against the predatory business practices of Big Real Estate and Big Tech. It also debunked a host of flawed, simplistic claims made by the real estate industry and YIMBY groups.
Callaci and Vaheesan essentially make the case that market solutions alone won’t fix the housing affordability crisis — something Housing Is A Human Right and other activists have been saying for years. Instead, the experts say that the broken rental-housing market itself needs a serious revamping, which includes implementing rent-stabilization laws to rein in the predatory practices of the real estate and technology industries. (Big Tech has come up with software that helps corporate landlords to collude and wildly inflate rents, fueling the housing affordability and homelessness crises.)
In their summary, Callaci and Vaheesan wrote:
“Recent research shows that the market itself needs to be fixed. Any plan to overhaul the housing market needs to, first, confront the power of landlords to raise rents. Second, it requires rethinking public governance of housing markets behind simplistic prescriptions to just free the housing market from government regulation, assuming lower rents will follow. And third, it needs to provide more muscular government involvement in housing, through price regulation, more robust planning, and even direct public provision.” (Italics are mine.)
Housing Is A Human Right has routinely said that the YIMBYs’ trickle-down, free-market agenda is incredibly simplistic, suspiciously so — it’s the same agenda that the real estate industry uses to kill tenant protections and then charge excessive rents. Callaci and Vaheesan back up our longtime argument, noting that Americans can’t trust Big Real Estate and Big Tech to do the right thing and keep down housing costs.
“While nudging developers and landlords with incentives can marginally increase the supply of housing,” the experts wrote, “they ultimately rest on a ‘trust the market’ strategy that has to date failed to solve the problem.”
A “trust-the-market” strategy, pushed by California YIMBY, the California Apartment Association, and corporate landlords, is beyond ridiculous: Does anyone really believe they’ll charge reasonable rents and do right by tenants? Just look at the widespread rent gouging by landlords in Southern California after the L.A. wildfires.
In fact, for decades, the real estate and tech industries have shown they only care about two things: making obscene profits off the back of hard-working Americans and then scheming to make even more obscene profits. And there have been constant stories, over the years, of Big Real Estate and Big Tech’s shady dealings and controversial CEOs who will do and say anything for a buck, including telling lies about rent regulations.
Callaci and Vaheesan pointed out: “Extensive empirical research shows that the simplistic story of such rent control leading to less and poorer quality rental housing is false.”
Instead, the experts noted:
“Some of the policy tools are already being used and familiar to the public: Rent-stabilization laws and other tenant protections are important. Given that housing is an essential need and tenants are often in a vulnerable position, landlords have substantial power individually and as a class. Second-generation rent-control laws do not freeze rents but rather generally prevent landlords from raising rents more than the local or regional rate of overall inflation, for instance. They restrain the unilateral and collective price-setting power of landlords and can mitigate the long-term effects of the RealPage cartel described above… Similarly, tenants should have just-cause protections that allow evictions only for causes stipulated in the law, such as a failure to pay rent or intentional damage to rental property. In addition to protecting tenants from abusive landlord conduct, these laws can promote housing and community stability as tenants can stay in one place for a longer period.”
Oddly, YIMBY leaders always make the case that it’s somehow a bad thing for tenants to actually afford rents and be able to set down roots in a community and have stable housing. Again, it’s highly suspicious, made only more so when California YIMBY, YIMBY Action, and Abundant Housing LA teamed up with corporate landlords last year to oppose Prop 33, which would have repealed statewide rent-control restrictions in California.
Housing justice groups, labor unions, social justice organizations, and prominent civic leaders, such as Sen. Bernie Sanders and labor and civil rights icon Dolores Huerta, strongly backed Prop 33. But those YIMBY groups, also known as “Corporate YIMBYs,” abandoned activists, labor, and tenants and worked hand in hand with corporate landlords to kill the initiative. Prop 33 was sponsored by AIDS Healthcare Foundation, the parent organization of Housing Is A Human Right.
Reining in the greed of Big Real Estate and Big Tech is not an insurmountable battle. Callaci and Vaheesan’s white paper shows we just need to band together and then put political pressure on elected officials to pass pro-tenant, pro-affordable housing policies and vote “yes” for ballot measures that strengthen rent regulations. Just as important, we can’t fall for the ridiculous lies rolled out by corporate landlords and Corporate YIMBYs.
Patrick Range McDonald, the author of this article, is the award-winning advocacy journalist for Housing Is A Human Right.
