Rent Control Won’t Fix the Affordable Housing Program

Affordable rentals in Santa Barbara are really hard to find. I get it—but rent control will just make finding them that much harder. What makes me say that? Three things. First, as an economist I’ve read a lot of studies on the impacts of rent control, and that’s what they show. Second, as someone who has lived in both Berkeley and Santa Monica, I’ve seen firsthand how much rent control can disadvantage those who don’t have the right connections or don’t fit the profile of a “good” tenant. And third, my partner and I own a single-family rental in S.B. and don’t want to hassle with rent control. If the city decides to go ahead with it, we’ll probably sell. I don’t think we’ll be the only ones to make that decision.

Economists have studied the impacts of rent control for a long time — the first study that I know of was published in 1946. Typical findings when rents are capped include (1) a reduction in available rental housing; (2) a deterioration of the remaining rental housing stock; (3) economic gains for existing renters; (4) economic losses for landlords who continue to rent; and (5) a rental bias toward older and smaller households — a bias that becomes more pronounced over time. The impacts are lessened with vacancy decontrol and cost-of-living adjustments, but they’re still there.

These findings resonate with me because of my own experience. As a Berkeley grad student, I “inherited” a rent-controlled apartment from a friend. I lost that apartment soon afterward, though, because the owner converted the building to condos. When I got my first job out of grad school, in Santa Monica, I looked for a rental for more than a month. Eventually I stumbled on the perfect place: a rent-controlled apartment just two miles from my work. It was managed by a small agency that a work colleague had heard about. It was not widely publicized, and the application process required an in-person visit. The building was in decent shape, and the rent was about half of what I’d seen advertised for similar places. In fact, the apartment was bigger than I really needed, and the rent was less than I was hoping to pay.

I don’t remember much about who lived in that building, except that it skewed white and single and English-speaking. Three years later I moved into my partner’s house in S.B., but I kept the place in Santa Monica as a crash pad for the one or two nights a week when I wasn’t commuting. I held on to it for another five years, until I finally decided it made no sense for a two-bedroom rental to sit empty five days a week.

Some 20 years on, my partner and I now own two houses in Santa Barbara, made possible because my partner’s mom left us her home when she passed away. Initially we thought about selling one, but we reconsidered: Who passes up the chance to own two houses in S.B.? Well the answer will probably be us, if the city introduces rent control. We aren’t professional landlords, and we don’t have the time or money to deal with stacks of paperwork or maintenance costs that aren’t covered by the rent. It will probably make more sense economically, as well as for our mental health, to sell the rental house and invest the proceeds elsewhere.

In sum — all those studies of rent control and its impacts? I believe them. It’s true that rent control helps out existing renters. I should know, I benefited from it for eight years. But rent control will only decrease the number of affordable rentals overall. Fewer new units will be built, and a lot of existing units will be sold or given over to family members or converted to condos — as I found in Berkeley. Other units will remain rentals but will be underutilized because tenants won’t let go of them even if they move away — like me, with my place in Santa Monica. And finally, for many people, the process of finding a rental unit will get even harder under rent control. Landlords will be more selective, because getting stuck with a bad tenant will be so costly. Over time, there’s a real danger that S.B. neighborhoods will become even less diverse, less family-oriented and less available to people with low incomes. If we don’t want that for Santa Barbara, let’s look into other solutions for our affordable housing problem.