Rent Control: A Bad Idea for Chicago… and Everywhere Else

Steve Cain | Principal

Rogers Park Builders Group recently posted an open letter to Will Guzzardi, Representative of the 39th District in the Illinois General Assembly. The 39th District includes parts of Logan Square, Avondale, and other rapidly gentrifying neighborhoods on the city’s Northwest Side.

Representative Guzzardi has proposed a bill (HB2430) that would repeal the state’s ban on the adoption of local rent control laws. A recent article in Crain’s Chicago Business quotes Representative Guzzardi as saying, “Chicago needs something to protect renters against the egregious rent increases that some bad-actor landlords use to move people out of their homes and bring someone richer in.”

RPBG strongly opposes any government regulation of rents. In our letter to Representative Guzzardi, RPBG outlines three broad areas of concern that we have about rent control and its impacts. For the full text of the letter, please link to our rpbg.org website. A summary of these concerns is as follows:

First, rent control doesn’t work. There have been many studies on the impacts of rent control in cities where it has been tried. There is close to unanimous agreement that (1) rent control is an ineffective means of helping the low and moderate-income families it is intended to benefit; and (2) the unintended consequences of rent control include lower maintenance of rental properties, reduced production of new apartment units, and increased average housing costs in rent controlled jurisdictions. As Peter Navarro, Professor of Economics at the University of California-Irvine, states in his 1985 study of rent control in Cambridge, Massachusetts, “the economics profession has reached a rare consensus: Rent control creates many more problems than it solves.”

Second, rent control is not fair. RPBG has argued before that government does a disservice to its citizens when it imposes the cost of public goods on private citizens. The cost of solving the affordable housing crisis in Chicago is enormous. Any attempt to impose a substantial part of that cost on just one group of people — in this case, property owners — is extremely unfair. It is also a shameless abdication of government responsibility.

As Representative Guzzardi’s statement above suggests, one of the rationales for justifying rent control is the stereotype that all property owners are wealthy and unconcerned about the welfare of their tenants. Another frequently used excuse is that state and local governments are broke. Neither of these arguments is acceptable. Most landlords are hardworking business people who have a vested interest in the well-being of their tenants and their communities. And elected officials who cannot pass a budget have little credibility when contemplating the imposition of large costs on private citizens for public goods.

Finally, there are better ways government, private owners, non-profits and other community partners can work together to solve the problem of affordable housing. These alternatives may include expanding the Section 8 voucher program; adopting more permissive zoning standards and building codes; and promoting economic development across a wider geography of the city.

RPBG prides itself on the excellent relationships we have cultivated across the Rogers Park community. We stand ready to work with city and state leaders on issues that reach beyond our area of the city. We believe we can find common ground in a commitment to a healthy and balanced housing market that serves all Chicagoans, regardless of income. But we flatly reject the notion that rent control will help achieve this goal. In fact, we are convinced it will do just the reverse.