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SCC Insight: Seattle ‘a worst-case scenario for rent control to be introduced’

A view from above Capitol Hill, 2015

With reporting by SCCI Insight

Council member Kshama Sawant has decided that 2019 is the year to push for rent control in Seattle — even though there is still a statewide ban on it. She held a rally in April announcing that she would be introducing rent control legislation to become effective if and when the state lifts its ban, and she invited the Seattle Renters Commission to present in her committee (video here) on why they are recommending that the city implement rent control.

I’m not an economist, not a landlord, nor a renter. But since we’re having this debate, I went to the UW Library and pulled the literature on rent control so I could understand the issues, the studies, and what the experts conclude.  Here is what I found.

Rent control is not a new idea, particularly in Europe. It was introduced in some cities in the United States during World War II as a means to prevent wartime abuses while the economy was see-sawing around. That “first generation” of rent control would freeze rents at a specific level; since then there is near-universal agreement that first-generation rent control is a terrible idea. But it led to “second generation” rent control policies, which allowed rents to rise a certain amount each year, often tied to inflation rates.

Not all rent-control policies are created equal; in fact, there are a variety of knobs and dials to be tuned in choosing a particular form to implement. The first, most basic question is whether all rental housing will be subject to controls, or only a subset. Many cities exempt newer housing constructed after a particular date. Others exempt ADUs and rented single-family homes. Many invoke “vacancy de-control,” wherein a rental unit becomes exempt from rent control when a tenant leaves and the landlord can reset the rent back to market prices. Vacancy de-control is popular with landlords but problematic in that it creates perverse incentives for landlords to evict tenants. However, it’s debatable whether it actually causes tenants to pay higher rents over the course of a tenancy. In California, rent control advocates are actively campaigning for the repeal of the Costa-Hawkins Act, which banned vacancy control and exempts certain types of housing from rent controls. Oregon’s new rent control law also includes vacancy de-control.

The benefits
There are two benefits of rent control that have support in the research. The first is the obvious one: it does, in fact, reduce economic displacement by allowing people to stay in their homes longer. The second is that it reduces the volatility of rental prices in “hot” housing markets; to be clear, it smooths increases into a steady predictable pattern of increases instead of wildly fluctuating increases (and potentially decreases when the market goes soft).

When all rental housing is subject to rent control, studies have shown that new rental housing construction drops off. Some jurisdictions have learned this lesson and have created public housing or “social housing” programs as a government intervention to ensure that additional housing continues to be built, some funded entirely by the government and some through subsidizing private development.

When only a portion of the housing stock is under rent control, then the housing market becomes partitioned, with very different dynamics between the two. The rent-controlled housing becomes a finite world unto itself, with low tenant turnover because of the strong financial incentive for tenants to stay put. The rest of the housing stock becomes a smaller pool of housing than before rent control was enacted, serving the rest of the population plus all the newcomers to the area. That increased competition for a smaller pool drives prices even higher; in fact, the economic models and the empirical studies both show that the savings that the tenants see in rent-controlled housing are offset by the increased prices in the uncontrolled market. People in non-rent-controlled housing are, in effect, subsidizing the rents of the people in rent-controlled housing.

That might be a good thing if the people in rent-controlled housing were the ones who can least afford market-rate housing, but rent control doesn’t work that way. Initially the people in rent-controlled housing are the ones who were in that housing already, but over time it becomes the ones with the best connections, the best ability to hunt for available units, and in some cases a tolerance for working the “grey market” to get a unit.

An effect repeatedly seen in rent-controlled markets is that landlords spend less on upkeep, maintenance, and upgrades. That doesn’t mean that they let the units violate building or health codes, but they do let the quality of the housing degrade until it matches what they are allowed to charge for it in rent. A corollary of this effect is that tenants end up doing — and paying for — more maintenance themselves, a hidden cost of rent control that offsets some of the benefit of lower rents.

Some studies have shown that rent control decreases tenant mobility, in that if a tenant receives a better job offer she/he will refuse to move and instead choose to commute further — or decline the job offer altogether  — rather than give up a rent-controlled unit. The same effect means that families with kids may stay in a rent-controlled unit that doesn’t have enough space for their needs rather than move, or an empty-nester couple may remain in a unit that has much more space than they need. That’s bad for the tenants, but it’s also bad for the community in that it misallocates the housing stock: the people who need particular kinds of housing often don’t end up in units that match those needs. Put another way, there is a risk of “overconsumption” of affordable housing by tenants in rent-controlled units.

As mentioned earlier, in many cities that have implemented rent control, landlords impose rent increases every year at or near the maximum allowed, rather than when their costs require it. This is because they know that if they fall behind the long-term inflation rate, rent controls will prevent them from catching up. And that’s only one tricky part of tying rent control to inflation; another is simply choosing what inflation metric to tie it to. Some cities tie it to broad-based consumer inflation, but in places like Seattle construction and building maintenance costs have far outpaced inflation, so a landlord’s ongoing costs will go up faster than consumer inflation rates.

We also mentioned “vacancy control” earlier, in which landlords aren’t allowed to reset rental rates between tenants. But studies have shown that vacancy control doesn’t change the amount paid by a tenant in the long term; it just shifts it from the beginning to the end of the tenancy.

The regulatory cluster
To address many of these issues, and to prevent landlords from gaming the system, jurisdictions often pile additional housing regulations on top of rent control. That “regulatory cluster” of rules may control when a landlord may evict a tenant; when additional rent increases may be allowed if a landlord wants to do a major upgrade; minimum maintenance standards; rules for offering a rental unit and for evaluating and choosing a new tenant; and other tweaks. Collectively they make it more difficult and more expensive to be a landlord, they create investment uncertainty since landlords don’t know what new regulations will be imposed in the future, and they ultimately create another strong incentive for apartment owners to convert their units to condominiums and simply get out of the rental-housing business.

The heart of the problem with rent control is that it doesn’t address the underlying cause of high rents: housing scarcity. If anything, it makes the scarcity problem worse by creating a fierce disincentive to building more rental housing. In the few cities with rent control where it hasn’t created havoc, it’s because the government intervened with a public housing program — essentially taking the burden upon itself to increase the housing supply after ensuring that private developers won’t.

Take Berlin, for example, the city used by Sawant in her press conference last week. She cited its introduction of rent control in 2015, and a news article showing that it had been successful. She neglected to mention that the article was published later in 2015, only a few months after rent control took effect and before it could have any real effects. Research and press coverage in the ensuing years have painted a gloomier picture of Berlin’s foray into rent control, with a recent article suggesting that in the end it hasn’t had much of an effect at all — largely because Berlin’s version of rent control is so complicated that it’s ineffective. But Berlin also committed to building tens of thousands of new housing units when it introduced rent control.

The Montreal model
In the Seattle Renters Commission presentation last month, they cited Montreal, which they consider to be the “gold standard” for rent control in North America. They claimed that Montreal has been booming, and has added 100,000 people in the last ten years — all the while rent control (first imposed in 1979) has kept rents very low and renters happy. But a closer look at Montreal reveals a different, more complicated picture.

Montreal is very different from every other major city in North America. It is a beautiful city of 1.75 million people, where French is the primary language for government, business, and the majority of residents. But that language barrier creates a level of social and commercial isolation in North America that kept the city in the economic doldrums for decades, and equally kept its resident population growth very low for long periods of time.

Population of Montreal (note graph is not zero-based)

GDP of Montreal

On top of that, Montreal benefitted from a huge amount of residential housing built in the late 19th century and early part of the 20th century, and a long-term consistent investment by the federal and provincial governments in building social housing. Montreal has 62,000 units of social housing; by contrast, all of King County has 8,000. Until very recently, Montreal has been a city with a stable population, low wages, and low rents.

As the Renters Commission pointed out, Montreal added 100,000 to its population in the last decade — but on a base of 1.65 million people. Seattle added 120,000 people over the same period, but from a base of around 600,000.

Also, much of Montreal’s growth has been since 2017, when it began a much-celebrated economic revival. As recently as 2014, local leaders were complaining that Montreal had been in an economic slump for 15 years, but the last couple of years the economy has picked up (though it still lags other large Canadian cities). But when we look at the construction and housing numbers for Montreal, we see some very interesting things. The value of permits for residential construction was in steady decline up to 2017 when it suddenly skyrocketed.

However, when we look at the housing stock itself, we see that the amount of rental housing available is continuing to decline, and nearly all the growth is in condominiums (with a small amount of growth in single-family homes). In fact, condominiums have bucked the trend in Montreal and grown steadily for years.

This is exactly what you would expect to see in a rent-controlled city: condo conversions and construction shifting from rental housing to owned homes. The provincial and federal governments cut back on their funding for social housing programs in Montreal several years ago, and now that a new housing crisis is emerging, Montreal’s mayor campaigned on a new push for public funding for affordable rental housing.

In the meantime, Montreal’s rental housing has developed a reputation for being a collection of older (though in many cases beautifully antique) units that have not been maintained well. Again, this is exactly what we would expect to see in a rent-controlled city.  Montreal is far from the rent-control paradise that advocates suggest, and it was saved from the worst liabilities of its rent-control policy by a long-term investment in housing. But to the extent that Montreal is now “booming,” the problems with rent control are coming home to roost.

What are the lessons for Seattle?
First, we need to recognize that Seattle is a worst-case scenario for rent control to be introduced: it already has a critical shortage of housing, there is not nearly enough public and subsidized housing, and the population and economy continue to grow. To the extent that the housing stock is starting to catch up with the population growth, we are already seeing overheated rents start to cool off. But adding rent control — especially without a major government investment in housing — would likely cause new housing construction to dry up quickly. We can demonize “big developers” and others (at Tuesday’s meeting, a presenter from the Renters Commission claimed that of the economists who oppose rent control, “many are venture capitalists”) but at the end of the day if the housing projects don’t make financial sense, they aren’t going to get built.

Second, regardless of whether Seattle enacts rent control (and whether it ever takes effect), the city needs to make a massive investment in public housing. Sawant has made this point many times, and she is 100% correct. We can have a robust debate about the extent to which the private market will deliver enough housing for people earning the median Seattle income or higher, but there is no rational argument to be made that the market will deliver housing for people with incomes below 80% of the median income; it simply won’t. Meeting that need will require government intervention. It will also require a lot of money, and unfortunately today it doesn’t look like either the federal or state government are likely to help much.

To summarize, the expert consensus is clear: rent control is bad policy, though that is least visible in places where there is ample housing supply and government commitment to build significant additional amounts of public housing. However, rent control is suicide in places where there is already a shortage of housing.

If you want to learn more about rent control and its effects, here are some resources:

  • A great four-part series from Market Urbanism;
  •  a survey research paper summarizing the issues, research, and consensus views of the economics community on rent control;
  •  A study of the effects of rent control in San Francisco.

S.C.C. Insight is an independent site dedicated to following, reporting on, and discussing the activities of the Seattle City Council. It’s written and managed by Kevin Schofield.

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72 thoughts on “SCC Insight: Seattle ‘a worst-case scenario for rent control to be introduced’

  1. Why fix a city problem for current and future citizens when you can rally for a populist measure that only offers relieve to some of your constituents?

    Rent control is as short-sighted as zoning regulation.

  2. Rent control will be a loser for all the reasons cited. Rather than die on that hill, there is a far better idea — land rents/land taxes/location fees that lower the cost to acquire land and put it back into productive use. The reason land prices are so high and why so many parcels are vacant (like that one block hole across from City Hall) is because the cost to hold land is low — just 1% of the assessed value. Assess a location fee to recoup that value and watch the cost to acquire land go down and development to go up.

    That value the landowners are after was not created by them: it was created by us, the taxpayers and workers who pay taxes to build roads and work at jobs that create economic value that brings people and investment to Seattle. We see that land around the Viaduct is changing hands regularly as speculators take their profits and move on. But none of the wealth being taken is going to the people who created it. It’s going to players, not workers.

    If all the vacant parcels and raggedy strip malls were assessed a 5 or 10% location fee on their land — and as a trade we don’t tax the buildings, to encourage development — we’d see some of those graffiti exhibits turned into construction sites and some of the seedy malls turned to mixed use retail/residential.

    Seattle is not densely populated. The entire city of Paris would fit in the north end, from downtown to 145th…2 MM people and all the other stuff, parks, the river, the museums and monuments. And we struggle to fit 700k in twice the area.

    • First it is untrue that there are no homeless people in Salt Lake City anymore – they were unable to keep even their modest program that housed around 2000 people state wide (Washington has around 22,000 – yup 10X more…) running an there are now twice as many people sleeping on the streets as there were in 2016 ….

      Also, you cannot compare Seattle and Salt Lake City… In Utah it is much easier to civilly commit someone, they are also much more likely to jail someone with significant mental illness. Those two factors in themselves remove more people from the streets in the first place. Then there is the overall population – Washington has 10X more homeless people and only a little around twice the overall population. How do you expect a program that failed in Utah to possibly be viable here?

      • They did end it, then they stopped funding it. Now they’re spending more on homelessness than before when funding the initiative. Just like us, because we’re dumb. Note: in Western Europe you don’t see homeless everywhere because they’re housed in SRO, because its CHEAPER to do and leads to better outcomes. In our resentment filled country (especially among the working class white people) aka trump voters we love to villify people instead of find solutions that we know WORK:

        Despite official support for initiatives like Palmer Court, Utah has not built any new permanent supportive housing since 2010.

        The National Low Income Housing Coalition estimates that Utah has a deficit of over 47,000 housing units for its poorest residents.

        Bailey, of the Crossroads Urban Center, likened housing for the poor to other forms of municipal infrastructure that require upkeep.

        “As long as people drink water, you’re going to have to figure out a way to supply it. As long as our economic system creates homelessness, we’re going to have to figure out a way to respond,” he said.

      • Not sure where you’ve been in Europe, but there is homelessness there EVERYWHERE. They’ve had tent encampments there for years and years longer than it’s been common here in the US. No doubt they probably do a lot of things better and have much better outcomes than we do in many areas, but the idea that you don’t see homelessness in Europe is just not based in fact.

      • Indeed… (numbers approximate)
        France – 140,000 homeless people population of 67 million -.2%
        England – 112,000 homeless people population of 55 million -.2%
        Germany – 284,000 homeless people
        population of 83 million – .34%
        Finland – 7,600 homeless population of 5.5 million – .14%
        Belgium – 3,400 homeless people population of 11.4 million – .3%

        US – 554,000 homeless people population of 327 million .1%

        the numbers don’t seem to be bearing you out…

      • Jim, not much of what Seattleite says is based in facts.

        Trying to have a discussion with him is like talking to some malfunctioning chat bot that absorbs reasonably thought out comments, twists them around, creates wildly off base assumptions, and then spews out unhinged, ad hominem attacks.

        Maybe 2.0 will be better…

    • I would prefer having a land value tax instead of a property tax. Building more housing is the only feasible way to prevent Seattle from turning into SF. A land value tax would encourage property owners to make the most use of their property, by building as many units as possible. It would put pressure on homeowners to abandon SFH zoning and allow the rest of the city to develop (rather than restricting development to only neighborhoods like Capitol Hill).

      • Not really following what you’re getting at here; property tax is already derived from a combination of our land value and improvements e.g. the house. For example, the land that my 4800 sf lot sits on is appraised at $366k while my entire property is appraised at $877k. If the county taxed on my land only then they’d be missing out on around $5k annual revenue from me…

        Also, what does “make the most” of our property mean to you? Does that mean subdiving our lot, hiring a contractor to build a second house in what used to be the back yard, work with our neighbors and the city to create an alley for the new house, and then sell the place off?

        Not being snarky with these questions, I’m genuinely curious.

  3. Sadly most landlords make about 5% return – go look at a multifamily for sales on Redfin and you can see all the rents, costs etc. It’s an awful lot of trouble…

    • Yeah right. My realty company tried to raise my rent from 1600 to 2200 and then after they tried the strong arm game with me I saw my place rented again for 1600. The problem isn’t mom and pop landlords the problem is developers. People like you are probably swine who work for them or you might even be one of them. Stop ruining Seattle.

      • So why not exempt mom and pop landlords from many of the onerous requirements and regulstions promulgated by the Council over the last three years? If they are not the problem, why are they getting the whip too?

      • Glenn: Yeah, the amazing thing about legislation is that you can change it and include a number of minimum units for rent control to be applicable: have under 10 units? no rent control or have more leeway. Developers aren’t suffering. There should be a city wide LIMIT on ALL properties in the city as to how much rent can go up each year. How will this create a problem? It would, for developers. It’s only a “disaster” if you are a professor in a business school or work for a right wing think tank. This “author” of this “study” is working on behalf of big business, big money, and the interests of the rich: he doesn’t even bother to speak about ONE person here in this city struggling and how hard it is for people even making 6 figures to get by. It’s not normal, and it has to stop. If this keeps up does our political class think people will tolerate this indefinitely?

      • This “author” is a journalist who wrote an article not a “study”.

        And no, people making six figures are not struggling in this city – you’d be served by stopping with the hyperbole, it’s making you sound unhinged.

      • You need 105k to even edge into the housing market in the Seattle region; and if you can, do you want to see what 100k a year income will get you? What about within the city limits of Seattle where the avg house is 800k? Yes, people making 6 figures are struggling. It isn’t hyperbole.

        More fake liberals here in Seattle. Did you hang up your gay pride flag on your window? Does that make you feel good? I guess you’re liberal enough and you’re done for the day. Actually doing something to solve homelessness and the housing crisis; especially when we all know it means needing to take on monied interests: “liberals” here are usually not willing to do that. Case in point: the head tax fiasco. City council folded like a bunch of babies, as the Donald would say.

      • Huh? Aren’t we talking about rent control here?

        But I’ll humor you: lemme get this straight, you’re saying that a single person, who makes $100k/year is struggling because a single family home in one of the country’s largest cities is too expensive for them to purchase as their first piece of real estate?

        What world do you live in? Here in reality a single person making $100k doesn’t expect to move from an apartment directly into a SFH in Seattle. They start by saving for a few years to make their first real estate purchase, typically a condo or if desired, a house in the suburbs. They make mortgage payments and over time gain equity as their overall mortgage goes down and the value of their property goes up. During this time they find a partner, who likely also works, and they eventually marry. Now armed with the equity from their condo, money they’ve undoubtedly set aside to go towards an additional down payment/moving costs, and a combined household income of let’s say $165k/yr, they set out to buy their Seattle single family home.

        OK, now that we got that out of the way, please feel free to go back to lecturing us moderate democrats, uuuh I mean fascist conservatives, about how rent control is the only solution to end homelessness and that to suggest otherwise is just a plan “BOUGHT AND PAID FOR BY THE DEVELOPERS”.

      • “Moderate Democrat”? So you’re what we used to call a Rockefeller Republican, aka Hillary Romney. You’re on here arguing for property developers, you’re the reason the Democratic party is in the state it is in, and why we have an orange monster in the White House. It’s fine, we can have corporatist Democrats, you can carry water for big business, property developers, and try to convince everyone that “there’s nothing to see here” there is no solution possible other than loosening regulations and letting developers build more: I’m not against letting them build more necessarily, but note, anything that potentially limits their ability to gouge renters is beyond the pale, but you’re ready and able to argue for their ability to build as much as possible. You may be a Democrat but if you didn’t notice, you’re not the kind of Democrat that younger Democrats like anymore because people see through the smoke and mirrors. Bernie is popular for a reason.

      • Brian: PS, I’m SO happy you figured it out for all of us! All we need to do is realize that we need to get married and become two income households. Single people better get their act together and get on your love connection, otherwise they need to pack up and get the hell out of Seattle. Wait so I have to get married, and my partner has to make, with me a combined income of 165k and then we have to buy a codo, build equity take that equity and then maybe we can get a house? Ok, thanks for that roadmap to a house. It’s pretty reasonable. I mean, so, all I need to do is get married now. Thanks, so again: on my salary of 100k or near it, it is next to impossible to buy an 800k house in Seattle. Unless I get married, per Brian’s advice. Brian do you know people I should marry who make 80-100k? Do you have a poor millenial dating service? You must be a Republican or a “moderate” Democrat, I’m so glad you figured it all out for us! All we need to do is GET MARRIED to someone who makes a lot of money! Thanks!!!! This solves EVERYTHING! I’ll make sure to tell everyone I know! It’s awesome that Seattle is so “progressive”. Want a house? Get married to someone so you can get rich even though you have a six figure income. Homeless with mental illness all over the city? Oh well. Anyways, isn’t Donald Trump Awful!!!

      • @seattleite: If you can’t afford an $800,000 house on your income, then buy a less expensive house or condo. Simple as that.

      • Wow, it’s just that simple. Buy something less than 800k. That’s awesome advice. You and the guy who told me I have to get married. You baby boomers have it all figured out after you messed up the environment and destroyed workers wages. Thanks!

      • Lol, I’ve never seen someone get so triggered by the word “married” before.

        As Bob concisely puts it, if you can’t afford an $800k home with your salary then buy something cheaper.

        As CD Neighbor points out, there’s around 500 of those cheaper options just waiting to be snatched up by someone making $100k/yr.

      • They also have no clue that when many of us purchased our homes these places that are so desirable and ‘hot’ now were the bad ones that people gave you a sideways look about when you told them your new address then….. I heard “you bought a house where” so much and yes, it wasn’t super awesome at the time. My neighbors ran an open drug bazaar, we’d wake to thing like ladies o’ the evening taking a shower using our garden hose or ding-a-lings accidentally firing their gun whilst showing it off to a friend, we stuck it out and watched it evolve, but now somehow we don’t deserve to live here anymore. Good grief.

    • Yup… there’s 474 homes currently listed on just one service I looked at that are $500K and under… 72 of those are SF houses. 14 of them are under $400K.. and that was a quick search of one real estate site. Can you buy one of those grand old homes on North Capitol Hill – no indeed. Can you buy a house in Seattle. That seems pretty clear – indeed you can.

      • The issue now is so many people feel *entitled* to live wherever they particularly want, or more so– they “deserve” to. All us old farts knew when we started saving for a house, we’d start out living somewhere crappy, and/or buy a dump and fix it up. And yeah– even go 50/50 with a friend to own a house. Most of us weren’t rich and nobody handed us s**t– not for a down payment, not for nothin’. In Seattle now the more-affordable area is pushed farther out, and they don’t like it. But it’s the same factors at work here. Oh well– that’s called being a grown up. And no, that doesn’t make us “corporate” Democrats. It makes you whiny babies.

      • Something tells me these lovely people are fat baby boomers who ruined our planet, gave us Reagan era tax cuts, wage cuts etc and now lecture my generation about how we feel “entitled” as their generation went to state schools for nearly free and we struggle with six figure debt often for our advanced degrees. We make a fraction of the money that they made; yet, we are “whiners”. My dad graduated with a bachelor’s degree from a state University, it cost next to nothing for him to go to school because it was subsidized almost entirely by his state. We lost that idea that PUBLIC UNIVERSITY should be largely funded by the state. We have no problem paying for prisons. University? Put that burden on students’ shoulders.

        Boomers who saddled us with a ruined environment, a horrible higher education compact where we are saddled with immense debt, and a new compact with our employers where we make a fraction of what they made when they graduated from college have NO PLACE TELLING US THAT WE ARE ENTITLED. You ruined our planet, you ruined the workplace, you ruined so much. The coming end of your generation – including the Orange Monster- will be a blessing for this country.

      • I’m 36, bro.

        Ok, off to pop some popcorn so I have something to eat when I come back and read whatever nonsensical tirade you come up with about my demographic. Can’t wait, should be epic!

      • Hey Seattleite, who you calling fat? Ha. Yes, I’m a baby boomer. Thanks for blaming the ills of the world on my sadly slumping shoulders. Yes, we blamed the previous generations for genocide, slavery, and all kinds of horrible things. It’s your right to blame us too, I reckon. I do admire your generation because, they are perfect. Oh, except the ones that aren’t, but I think I’ll group you all together, because it’s easier that way, isn’t it? If you base your feeling on any group of people, on the actions and voices of a few, you miss the opportunity to enjoy conversations with people who are different than you. I have noticed that my generation seemed more cabable of accepting other points of view without feeling personally threatened. I remember listening to speakers on my college campus that had a pretty dramatic left and right extreme perspective. There were some protests, but they were allowed to happen. It’s hard to listen when your mouth is always open. Make it a great day.

    • CD Neighbor, I chuckle because I heard the same thing from friends when I bought my first house, in Miami, in the “bad” section. (the section that’s all trendy so many years later, yeah). I remember one guy saying, “why do you want to move so far *away*?”. And I asked, “from WHAT?”. People thought the popular neighborhood was the be-all/end-all, and everything was measured from there. Like everywhere, urban pioneers moved from neighborhoods we couldn’t afford to areas we could, and started fixing. Nobody wants to put in the time for that anymore.

      • Oh wow, you old people have figured it all out. By urban pioneers dont you mean pushing black and brown people out of their neighborhoods and making Seattle even whiter than it already is? Nevermind that boomers and older Xers had all the benefits of the social welfare state set up by the “greatest generation” and then you guys went on to dismantle it due to your disgusting greed in the 80s, and went on to ruin our environment. Boomers left my generation with a burden of fixing your mess; you slept at the wheel in your burbs and left racism totally unquestioned. We’re supposed to exalt you for being an urban pioneer? Something tells me you probably think you are a “liberal”. You have a Hillary 2016 bumper sticker on your Prius, typical PNW fake liberals.. waxing lyrical about gentrification. Gimme a break.

      • Sorry bub, all of your ass-umptions about me are dead wrong. I’m not a boomer. I paid for my education and no one, white, black or brown was pushed out of this house – it was vacant and had been for some time when I purchased it. I don’t and never have owned a Prius and have zero bumper stickers. I’ve never lived in a suburb, not as a child or an adult- and golly gee, it’s so nice your dad got to go to cheap college, mine was lucky to graduate high school.

        Benefits of the social welfare state hah – all I ever heard as a teen and 20 something was that there never would be any SSI or medicare by the time I was old enough to actually collect it. The extent of my ever ‘taking advantage’ of any social safety net was one time collecting unemployment for just a few months when I was laid off from a job with the federal government…. but I got to go back and that was that. My early life taught me that I better damn well be self sufficient and so I have been.

      • Make that 0 for 2 because it’s all wrong about me too. Nobody pushed out of any house I’ve ever bought (google demographics about Miami if you want to see how wrong you are), no cheap college either (paid off loans for years too), never lived in a suburb (ever), no Prius. Drove a cheap car while everyone else was over-spending on flashy wheels they couldn’t afford (just like today—some things never change). I’ll give you one thing— I think Republicans have done a despicable job of slashing aid to education but it sureAF wasn’t with me helping them, ever.
        You seem to think we’re saying everything’s fair, but that’s not the point at all. It’s not. What we need are solutions that actually help, and I sure haven’t seen it yet. We can’t rent-control our way out of this. We can’t ever build enough public housing to accommodate the demand, under the current regressive WA taxation system that lets high-earning renters off easy and asks nothing from businesses. Rent control will end up screwing the middle class again. Head taxes do nothing but push jobs to the Eastside where cities are fine with doing nothing while Seattle bears the brunt. Seattle’s answer to *everything* is a property tax levy which will eventually run out every middle class homeowner from Seattle, leaving nobody but apartment buildings and landlords (who will both find a way to game it) and make housing affordability even worse. People ALWAYS find a way to game the system with rent control. We need to do something but this isn’t it.

  4. This is bought and paid for advertising by the developers of Seattle. The answer “Rent control = bad”. Hey, author, please explain why a control on rent increases on ALL rented units would be bad? E.g.- rent can only increase by 3% per annum on all rented units? Berlin Germany has another idea: A rent freeze of 5 years, NO rent hikes for 5 years, after which rent can only increase by 2% per year on all rented units. The rationale being that the city is waiting for new housing to be built to ease market needs.
    The Seattle “progressive” nonsense is ridiculous, take a look at all of our papers, all you get a is a steady stream of right wing blather about why teachers unions are evil, and why rent control is the worst thing on earth. Let’s just see what happens down in Oregon. We are after all a comparison: one state has a working model, another is a failure. Oregon has an income tax, we don’t. They have surpluses we have deficits. Something tells me that their rent control model will work.

  5. Excellent, well-researched article. Most people are too lazy to get beyond the “We deserve rent control” posters. And people like Ms. Sawant are counting on that. If you do any research, or have experience from living in a rent-controlled city, you most likely are aware of the downsides. Thank you Capitol Hill Blog for providing good information.

      • Wow. Really? “Insert FoxNews talking points.” Facts that don’t contribute to your narrative are still facts. I was speaking from my personal experience in living in a city with rent control. It created a false economy. Almost all rentals became part of this underground network. It didn’t keep rent cheaper, it just made the whole thing shadier.

  6. Interesting. The people trashing this article immediately assume that this is “bought and paid for by ____” So instead of being curious and open-minded enough to become informed voters, it’s so much easier to say that this is propaganda paid for by advertisers. I don’t know the business model of the Capitol Hill blog, but I’m assuming the little bit of advertising paid for by real estate interests, is tiny compared to the subscribing readership base. A quick look at the advertisers seems to be pot shops and Ashley Madison. I applaud them for running an article that will be controversial considering the readership. I’ve lived in a rent-controlled city. I found that many of the problems pointed out in the article were precisely true. Just because an article comes to conclusions different than your own, perhaps you should actually do some research yourself. Perhaps you were a little too influenced by a bumper sticker.

    • The answer we get from this article: nothing works. Property developers who try to jack up rents, like mine by 10-20% sometimes a year, love this “we can’t do anything” message. Meanwhile in Berlin they’re talking about a 5 year freeze on all rent increases. I’m curious, yet again, why an across the board rent increase limit on ALL rental units in the city of Seattle, e.g. 3% per annum would be chaotic. It would be, for the developers.
      This isn’t a controversial article, it could have been written by the editorial page of the Seattle Times, which is in fact bought and paid for by the radical right. Let’s just see what happens in Oregon.

      • Hmmm. Let’s see. Limit cost increase to 3% per year. If all costs to landlords would also be limited to 3%, you might have a debate. Considering the reality that our property taxes alone have doubled in the last 4 years—not to mention all the other costs associated with managing a property, I don’t think limiting income when you can’t limit costs will work. You talk about it hurting “developers,” but as has been pointed out in many other articles, too much restriction on landlords, and the small mom-and-pop owners will sell out to big developers or convert to condos. Be careful what you wish for.

      • The Seattle Times is bought and paid for by the radical right? Tell me then, who buys and pays for Sawant? Would that be the radical left?

      • Property developers have billions of dollars. Sawant speaks for marginalized people being pushed out of this city by monied interests. Where’s the money in that? Big poverty money? All this in our supposedly “progressive” city. What a undeserved label. The Seattle Times Editorial page is bought and paid for by monied interests it’s like Fox News.

      • Seattle-lite – Now you did it, you jumped the shark. It’s been mildly interesting to read your arguments for rent control. You’re passionate, I’ll give you that. However even you have to be kidding when talking about Sawant, money, and who she represents. She has had zero interest in representing the people in her district. Her lack of response to her actual constituents is legendary. She is only concerned with things that build her brand and give her tv exposure. As far as where is the money in her shtick? Apparently it comes from special interest groups from out of state. Tell me, why is she not participating in the democracy voucher program?

      • Matthew – I don’t work or volunteer for nor am I allied with Sawant. I didn’t even vote for her. She doesn’t have the support of big business; you really think she’s getting millions from “outside groups”? Meanwhile, this discussion is regarding property developers with BILLIONS of dollars, and you think SAWANT is comparable to their political sway and lobbying power and financial resources? Come on.

      • It’s ludicrous to state that the Seattle Times, which is a moderate newspaper politically, is a tool of the “radical right”. Such gross exaggerations only mean that your credibility is questionable.

      • The Seattle times EDITORIAL page is moderate? Really? Like how they railed against teacher unions in their modest desire for reasonable pay for the hard work they do?

      • Seatteite, it’s interesting that you are obviously not a fan of business. You speak of them as the enemy. And that Ms. Sawant is obviously the one focused on helping the poor and marginalized. Well, think of your name. “Seattleite.” Our city was built on jobs created by those businesses you seem to hate. Sure, we need to regulate businesses and industries to make sure they are good citizens. We need to tax them. And we need to apply pressure to them. Ms. Sawant is not creating jobs. She’s throwing verbal grenades to fire people up. She is devoted to a National Socialist agenda, not an agenda focused on serving her constituents.

    • RC advocates are forced to disregard the actual research, which all shows the same outcomes expressed in this article. Conclusively. Repeatedly. That and an apoplectic narrative of rapacious greed on the part of housing providers is all they’ve got, and they need them both in order to gin up fear and loathing amongst a receptive constituency so they will go out and vote against their own interests. RC reduces the number of homes available for rent, increases rents more quickly overall, and accelerates gentrification for all but a small number of tenants who never move. It’s been the same outcome everywhere RC has been enacted. It’s not even really debatable at this point.

  7. They could use part of the city’s 1 billion dollar budget that they spent last year on building permanent housing. They don’t have to build fancy facilities they could build something essentially like a hotel with connected units with doors between that are locked if the tenants aren’t sharing with a family. And they could have refrigerators sinks showers and toilets all handicap accessible with a big communal kitchen in each building. A design with connecting Studios that can be connected or not connected and a big communal kitchen but they can keep their refrigerated items separate in their room and go out and use the communal kitchen at mealtimes. It would be a much more efficient way of handling this and there could be an office for community service Connections in the lobby or main floor of the building. For the 1 billion dollars that they spent paying for other people’s mortgages, they could get several buildings built and segue into these sort of supported housing units that would be available for other people to use after the initial people are through or have moved on.

    • Again. 3% doesn’t work for you. How about 5%? What you’re saying is more of the usual: big interests need to be protected, property developers should be able to rip you off and charge you whatever they want, and they do. Again, why not an across the board limit on what they can raise the rent per year? Other cities do it, yes, think globally. The developers are lobbying and paying off so many people to get what they want, this is a sector of the economy with billions of dollars in it, you really think they’re going to let policy get by with an honest debate? It’s being clouded, yet again, with smoke and mirrors. Now it’s about “mom and pop” when you’re really talking about big business. Mom and pop aren’t the problem. Mom and pop aren’t raising rents through the roof anyways, so stop with the canard. BOUGHT AND PAID FOR BY DEVELOPERS. I make six figures and I find it hard to get by in this city, we have had enough of it.

  8. Hi, Kevin. I have a few follow up questions for you.
    1. Did you interview any teachers in public education who are currently renting? Did you interview anyone who works in a grocery store, restaurant, or retail environment that is currently renting? Did you interview anyone that lives in an apartment and receives Social Security?
    2. A team of researchers at UW released a study in February of this year that Evictions, rent spikes contribute to Washington’s homelessness crisis ( If rent control, in your opinion, is the worst-case scenario for housing in Seattle, then what is the better option to avoid further epidemics of homlessness due to rent spikes?
    3. Can you cite your sources for “it already has a critical shortage of housing,” since apartments do not share vacancy data?

    • Are some of these people even reading the article?

      James: “…what is the better option to avoid further epidemics of homelessness due to rent spikes?”

      Kevin, second to last paragraph:
      “Second, regardless of whether Seattle enacts rent control (and whether it ever takes effect), the city needs to make a massive investment in public housing. Sawant has made this point many times, and she is 100% correct. We can have a robust debate about the extent to which the private market will deliver enough housing for people earning the median Seattle income or higher, but there is no rational argument to be made that the market will deliver housing for people with incomes below 80% of the median income; it simply won’t.”

      • Brian: Please explain why a citywide cap on all rent hikes limiting them to a certain percentage upon renewal of leases would lead to rents increasing. Berlin Germany, as I said, has a proposal to freeze ALL rents for 5 years. We could do that, after all we are so “liberal” here. Yeah right. We are a corporatist city, just take a look at how Amazon controls our city, city council folds at the drop of Jeff Bezos’s hat.

      • “Please explain why a citywide cap on all rent hikes limiting them to a certain percentage upon renewal of leases would lead to rents increasing.”

        Kevin does an excellent job outining the many pit falls of rent control – I’ll redirect to the first 1,000 words of this article, should be able to find what you’re looking for in there.

  9. Seattle has had rent control since the 1980’s – of floating home moorage rents. Chapter 7.20, Seattle Municipal Code. They are not included in the statewide rent control ban. RCW 35.21.830. So, how well has that worked? The author seems unaware of it.

  10. I’m a small time landlord making a very small return on investment. I’m fair to my residents when it comes to increases, and I’m willing to take a risk on those that are sincere but have needs. But I’m reamed, steamed and dry cleaned. I’m done. I’m out. Well, almost….getting ready to sell b/c of this barrage of rules that create unintended consequences. And it’ll be the big, bad developers that will take over and several of my affordable units will be off the Seattle market — including section 8 (of which I’ve always been a supporter). But the city council and interest groups don’t want to hear what we have to say as small-time property owners. The city and county have vacant land they own. I proposed that investors such as myself would take a long term $1 lease on one of these properties and build affordable, decent units in the city and rent at rates set by the city. Yes, I would make a small profit – but it would be a win/win with the resident also getting a great deal with only a nominal cost of living based increase as needed. Ask Frank Chop at the state senate about this: Over his dead body would anyone from the private sector run “public” housing. Well, what a great help that is. Gov’t doesn’t have the money – but those with a good idea and money are shut down over what? A principle of idiocy?

    • I’m a small time landlord myself, not in Seattle though. Like you I do not clear a sizeable profit. I am not particularly burdened by regulations…. When I find a good tenant I do not raise rents on them significantly if at all; rent increases are quite modest. In my experience this has been the way most mom and pop landlords deal with tenants. I live in Seattle, please contrast this with how developers deal with their tenants. All of my friends, and myself, have been strongarmed by our developer landlords here: upon renewal we have been asked to pay 15-25% more than the previous cost and we are told this is the “market rate” of our apartment. It’s a high stakes game to see how badly you don’t want to move. They end up advertising, and you always see your unit renting for the same price you rented it for, or close to it. Guess why? They don’t care. They want as much money as they can squeeze out of you as possible, and I pretty much have to move every year in Seattle upon lease renewal. The problem isn’t mom and pop owners, the problem is developers. Stop trying to muddy the discussion; it’s like when we discuss the farm bill with billions of dollars of subsidies and someone talks about mom and pop farms when we know it’s all about agrabusiness.

  11. Great article. I have been researching a bit myself about how to make quality housing in good neighborhoods affordable to all people. Like most things, the issue is full of nuance and neither the big real estate developers nor the rent control advocates are interested in a real. It does seem like most of the big real estate developers (which are generally getting their equity from sources like teacher pension funds (conundrum!)) are purely profit motivated and not at all interested in something more that making a buck. This doesn’t really seem to hold true for some of the smaller or locally based developers. As far as I can tell it seems like those that are pushing for things like rent control are generally very spiteful individuals that just hate anyone that is more successful than they are. Meanwhile the other 90% of us lose out as those two groups suck all the wind out of the room.

    Through all the nuance one thing has always held true and will always hold true (either in a legal and government approved market or on the black market). Supply and demand determine the cost of everything. You can be upset about the side effects of how a free market operates, but supply will always fluctuate to meet demand if the government does not interfere. How do we make more affordable housing available to more people? Allow developers (and homeowners or anyone else that wants to) to build at least low rise 6-7 story apartments/condos on every parcel in the City (heck the whole metro area). Prices will fall to meet demand. Our land use laws, building codes, design review and approval process are fabricated “solutions” to housing that stiffle the creation of new housing. Who benefits from that? You guessed it. Those that already own rentals.

    Build baby, build!

  12. “Cost of housing is too high!”, *proceeds to vote for every single property tax levy that comes up*

    -Seattle Voters

    • Nobody has touched on a major factor here– we have a lot of VERY highly paid residents who rent, who most certainly do pay some of these property taxes in their rent. But not the full brunt. And they don’t move to a more expensive apartment when they get a big raise or a windfall. They tend to stay right where they area. This state needs an income tax, for lots of reasons– including be able to finance this public housing everyone seems to support; and to impose a fair-share burden on some of the highest earning renters who are to a great extent shielded from this never-ending series of tax levy increases. They’re getting a very easy ride.

  13. Nicely researched and thought out article. I happen to know Kevin personally, and I like him and trust him, but I read the article and liked it before seeing the author. For those interested, there’s a good Freakonomics podcast on this topic as well, and it reaches similar conclusions.

    There are a lot of liberals commenting who are frustrated by the conclusions of the article. I’m a liberal, and I find it frustrating that it’s so hard to solve housing problems, but I blame the universe for being hard, not the author.

    We do have a housing problem, and we do need solutions. It probably includes paying for a variety of services (shelters, mental health, substance abuse counseling, etc.) to help the homeless. It probably includes making sure that when corporations build huge new office developments, they pay the added costs on traffic, housing and congestion those bring. It probably includes incentives to build housing and the zoning to allow it. But based on the economic research, it probably doesn’t include rent control.

    For those who don’t like the conclusion that rent control doesn’t work, remember how we feel about anti-vaxxers and climate-control deniers. Sometimes science gives a tough message to idiots or conservatives; sometimes science gives a tough message to liberals. We need to accept what the science says (or find data/science that disproves it) — not resort to ad hominem attacks on the bearers of bad news.

  14. I’ll add my voice to the appreciation contingent. Many thanks Kevin for an insightful and dispassionate article. And thanks also to the CHS blog for hosting.

  15. Great article. As far as housing goes, it’s clear the way to keep prices down is to… build more of it. Both private and public housing.

    However, rezones are controversial, and tax payers don’t want their taxes raised to pay for public housing, so people go hunting for magic solutions like rent control.

    I think Seattle has done a good job keeping rents down by allowing lots of construction. We’re consistently cheaper than california. We just need more investment in public housing.

  16. Very well done. Enlightening. I appreciate the attention to detail and the non-sensationalist reporting style.

    I was on the fence before but now I oppose rent control. That looks like a scary situation if it is enacted.

  17. How would you feel if you saved & worked hard to buy something, then decided to sell it, only to be told by a government bureaucrat that you can’t sell it for that price. That’s #Rentcontrol & @cmkshiama agenda. Politicians have no right to tell me how much i can charge for something that is MINE.