By Caitlin Sugrue Walter, Ph.D. Senior Vice President of Research
Caitlin Sugrue Walter, Ph.D., is Senior Vice President of Research, with primary responsibility for conducting NMHC's research on apartment industry trends. Prior to working at the Council, Caitlin was an analyst at a real estate advisory firm. Caitlin has a B.A. and B.S. (Planning and Public Policy, Criminal Justice) from Rutgers University. She also holds an M.A. in Urban and Regional Planning and a Ph.D. in Planning, Governance and Globalization with a concentration on metropolitan economies and development from Virginia Tech.
A new survey of 45 economists from elite institutions found near universal agreement that national rent control (framed in the proposal as a “rent cap”) would do little to help Americans and would ultimately exacerbate the shortage of available housing. According to the University of Chicago survey:
- No economist agreed rent control would substantially reduce income inequality.
- Just 2% of economists surveyed agreed that a national rent cap would make middle-income Americans substantially better off over the next 10 years.
- 62% of the economists agreed or strongly agreed that the Administration’s rent cap proposal would substantially reduce the amount of available apartments over the next 10 years, compared to just 7% who disagreed.
Rent control is one of the most researched economic policies in the world with decades of research confirming its negative consequences. In fact, a 2024 independent literature review found:
“[Rent control] results in a number of undesired effects, including, among others, higher rents for uncontrolled units, lower mobility and reduced residential construction.”
“It has been proven time and time again that rent control hurts renters. Regardless, in this political season, we continue to see politicians offer rent control proposals that give false hope to struggling Americans in an effort to gain votes,” said NMHC President Sharon Wilso Geno. “The facts are that rent control does not build a single new home, disproportionally benefits wealthy, non-minority residents, exacerbates the housing shortage and ultimately makes housing more expensive. We know that there is really only one thing that works – building more housing.”
Fact-Checking the “Facts”
The Administration’s recent rent cap announcement included a “Fact Sheet” which makes a number of claims about the rent cap proposal which are mischaracterized or not supported. The sole justification for the policy cited is “research” produced by Accountable.us, a dark money organization of Democratic campaign operatives whose mission is to further an extreme progressive agenda. The analysis falsely claims that recent earnings from six publicly traded apartment firms show significant increases in rental income. In fact, the average annual rent increases for apartment companies mentioned were actually between -0.9% and 2.2% in the first quarter of 2024, compared to 3.2% overall inflation (measured by the consumer price index). Conversely, their expenses increased between 1.3% and 7.5%.
The “Fact Sheet” also claims as a basis for the two-year rent cap that it will serve as a “bridge” to new supply coming online in the next two years. Construction has already begun to decline substantially from average historical levels; data from the U.S. Census Bureau show multifamily starts decreasing 35.1% from 2Q 2023 to 2Q 2024. This means that the recent declines in rent growth due to the new supply currently coming online are at risk of being lost without continued significant additional new supply, which we already know will not be realized in two years due to the substantial decline in new construction starts.
In contrast to the rent cap initiative, which would require Congressional action, the White House announcement also included several supply-side actions. These actions are based on well-established principles that will improve housing affordability, including donating public land for affordable housing development and repurposing existing buildings, in this case the repurposing of U.S. Postal Service facilities. Additional resources through HUD and the Department of Transportation for the development of affordable housing were also part of the announcement.
Looking Forward—Staying Focused on Solutions
Given the tremendous shortage of available homes, policymakers should also support initiatives like the Administration’s Housing Supply Action Plan, which includes a multi-pronged approach to addressing the challenges to developing the new housing America needs. In addition to increasing supply, policymakers must also ensure assistance is available for those who simply cannot afford housing. Multifamily housing providers continue to advocate for the funding of critical programs that focus on housing affordability, such as the Section 8 Housing Choice Voucher Program, Project Based Rental Assistance, Rental Assistance Demonstration, HOME, CDBG and Rural Housing programs.
To learn more about rent control, visit www.nmhc.org/rentcontrol. To learn more about solutions, visit https://housingtoolkit.nmhc.org/.
