While Economics 101 generally treats rent control as bad policy, a group of economists say that model is being proven wrong.

A group of economists and academics last week sent letters to the federal government, calling on the Biden administration to establish federal rent control and tenant protections for the 12 million renters nationwide living in properties with federally backed mortgages.

Signed by 32 economics and 143 academics, the letters complement a broader Homes Guarantee campaign launched by People’s Action, a national network of political organizations that aim to build power for working people.

“Nationally, median rent has surpassed $2,000 for the first time, and there is not a single state where a worker earning a full-time minimum wage salary can afford a modest two-bedroom apartment,” the economists wrote in a letter to the Federal Housing Finance Agency, which had released a request for input on tenant protections.

“We have seen corporate landlords — who own a larger share of the rental market than ever before — use inflation as an excuse to hike rents and reap excess profits beyond what should be considered fair and reasonable,” the letter adds. “Renters are struggling as a result.”

A group of climate researchers, local elected leaders (including four from Florida), and 17 U.S. senators (not including Florida’s Rick Scott and Marco Rubio) also sent letters to the federal government backing limits on rent hikes for buildings financed by loans from Fannie Mae and Freddie Mac, two government-run private entities which support nearly 25% of rental units in the United States.

“Congress has repeatedly affirmed that, as a condition of their Congressional charters, the Enterprises [Fannie Mae and Freddie Mac] have ‘an affirmative obligation to facilitate access to affordable housing for low- and moderate-income families,’ including by establishing a requirement to finance housing affordable to low- and very low-income renters, and a ‘duty to serve’ very low-, low-, and moderate-income families in underserved markets,” the group of U.S. senators wrote.

“The most effective way to ensure that Fannie Mae and Freddie Mac are fulfilling their obligations is by implementing tenant protections for all renters living in properties they back,” the letter adds.

The call to action comes four months after Florida Gov. Ron DeSantis signed into law a measure banning rent control statewide, and one month after DeSantis approved a separate bill wiping out local tenant protection laws in over 30 Florida cities and counties.

Rent control, also known as rent stabilization, has been a hot-button issue in state legislatures across the country, not just Florida. A tracker from the National Apartment Association — which opposes rent control — shows that over 30 states (like Florida) preempt local governments from implementing such a policy, which generally looks like capping rent increases to the Consumer Price Index or the CPI plus a modest percentage.

A rent control law in Oregon, for example, limits annual increases to 7% plus the change in the CPI over a 12-month period. Rent control, also known as rent stabilization or by the vaguer term “rent regulation,” also exists in some capacity (either statewide or in certain localities) in California, Minnesota, New York, and Maryland among other states.

It’s touted as a measure to halt price-gouging, prevent displacement and keep people housed.

Orange County government put a modest rent control policy up for a vote last November — and it earned over 226,000 votes (making it more popular than either gubernatorial candidate, Charlie Crist or DeSantis, or former U.S. Rep. Val Demings in her bid for Sen. Marco Rubio’s seat.)

Landlords and developer trade groups sued, however, blocking it from going into effect, and now local governments in Florida are prohibited from trying to do such a thing at all.

Critics of rent control say it will only drive up rents in the long run, and drive away builders and developers, ultimately constraining the rental housing supply.

It’s for those reasons, and others, that most economists tend to oppose it — so it’s notable when any economist publicly comes out in support of rent control, with data to back up their points.

The Thursday letter from economists in support of rent control says the “Economics 101” model that points to the evils of rent regulations is “being proven wrong.”

Local laws in San Francisco and New York City, the letter reads, have shown to lower housing costs for households living in rent-regulated units. And there’s evidence that rent control in San Francisco has helped “stem tenant displacement.”

Beyond rent control, the Homes Guarantee Campaign also calls on the federal government to establish other tenant protections, such as “just cause” eviction protections, a national ban on source of income discrimination, and limiting security deposits to one month’s rent, among other policies.

“The system as we know it today has failed everyday people, many of whom make impossible choices between rent and food, their homes or their medications,” advocates wrote in a statement.

“The status quo is not working for the people, it is only working for the profiteers, and it is time for change. It is time for the federal government to make changes to that system, to correct the imbalance of power between landlords and tenants, to protect tenants, and to stabilize the American economy.”

By McKenna Schueler
https://www.orlandoweekly.com/news/economists-academics-back-federal-rent-control-four-months-after-florida-bans-it-34798319