Supply and Demand Issues Lead to Rent Control Proposals

Due to an explosion in new jobs, and not enough new housing being built to meet the increased demand, several municipalities in Silicon Valley have rent control referendums on the ballot next month. That means there’s a battle being waged between apartment industry representatives and advocates for rent control initiatives.

Tenant organizations, unions and church groups are knocking on thousands of doors in an effort to drum up support for measures designed to protect apartment dwellers from runaway rents.

On the other side, landlords and real-state agents are pouring money into mailers and television ads in a vigorous effort to battle the initiatives.

At the root of the issue is that there isn’t nearly enough housing for all the new jobs. Between 2008 and 2015, the four counties that make up the heart of the region added 400,000 jobs, while permits were issued for just 86,000 new housing units…

The measures call for rent increases on some or most rental apartments to be capped, generally to a few percentage points a year, for existing tenants. When tenants leave, rents could reset to market rates…

Economists widely criticize such laws because of inefficiencies they produce: Tenants generally get to keep their rents steady regardless of income, allowing some wealthy residents to get choice apartments for low rent as long as they remain in them for years.