The Wall Street Journal recently released an article touting a grassroots movement for rent control. It cites that U.S. rents are up 18% on average in some markets as the catalyst to a new world order in which rents are set by the state government. So how realistic is the concept of rent control in the markets that have not embraced it over the past 100 years? There’s a lot more math to this issue than what the Wall Street Journal released to readers.
Let’s get down to the actual facts as can be found on a simple search on Wikipedia
Here are the current stats in the United States regarding rent control, straight from Wikipedia:
Oregon is the only state with a statewide rent control law, enacted in 2019. Four other states—California, New York, New Jersey, and Maryland—have localities in which some form of residential rent control is in effect. The District of Columbia also has rent control for some rental units; publicly owned or assisted properties, properties built in 1978 or later, and properties held by an owner with fewer than five rental units are exempt from D.C.'s rent-control law.
Thirty-seven states either prohibit or preempt rent control, while eight states allow their cities to enact rent control but have no cities that have implemented it.
As of 2019, about 182 U.S. municipalities have rent control: 99 in New Jersey, 63 in New York, 18 in California, one in Maryland, and Washington, D.C. The five most populous cities with rent control are New York City; Los Angeles; San Francisco; Oakland; and Washington, D.C. The sole Maryland municipality with rent control is Takoma Park.
Wow, that’s not in any way similar to the tone of the article, which made it sound like rent control was just around the corner nationwide.
Now let’s dissect those facts
There are 50 states in the U.S. Of those 50 states, rent control in any form is illegal in 37 of them. So that means that even a discussion of rent control is unlikely in 74% of states. To change the laws of a state would require a massive referendum, followed by massive litigation – and it has to make it to the ballot box first which requires enough votes in the state legislature. So that means that any discussion of rent control in these 37 states is basically a waste of time.
Then you have 8 states that allow rent control on a city-by-city basis, yet no city in that state has ever enacted rent control. Those 8 states are Montana, Wyoming, Nebraska, Nevada, Pennsylvania, West Virginia, and Virginia.
And then you have rent control already enacted in just one state, Oregon, and in some cities in California, New Jersey, Maryland and New York.
Now let’s attach some common-sense metrics
Let’s forget the states that do not allow rent control as a point of law, and then write off those states that already have rent control in one city or more, as well as the state of Oregon (the only state in the U.S. with state-wide rent control laws). So really what’s up for grabs -- if there was to ever be any additional rent control in the U.S. -- emanates from those 8 states where rent control is actually legal but has never been adopted. Let’s look at each one independently:
- Wyoming. This is one of the strongest “red” states, with the last time they elected a democratic president being in 1964. The odds of Montana passing any form of rent control is about as likely as being able to jump from San Francisco to Hawaii.
- Montana. This state is just as staunchly red as Wyoming. No chance it would ever allow rent control, and everyone knows this.
- Nebraska. This is a solid red state, with only LBJ in 1964 as a democratic victory since inception.
- Nevada. This is a “swing” state that is almost evenly divided between red and blue votes.
- Pennsylvania. Another “battleground” state that is very evenly divided between red and blue.
- West Virginia. This is a predictably red state with the only thing blue being Joe Manchin (who is the person who blocked the Biden agenda).
- Vermont. It’s hard to find a state that is more left-leaning than Vermont.
- Virginia. This is a state that can politically go either way, but still has a majority of red voters.
So the simple analysis of these eight states is that there are only four that might ever adopt rent control: Nevada, Pennsylvania, and Virginia.
Putting it all together
Despite media groups trying to appeal to their woke reader base, the simple fact is that rent control is not pending in any form or fashion in 41 states (which represents 82% of America), already exists in 5 states (10%) and might have a chance in maybe 4 more (8%). Therefore, the correct title for this Wall Street Journal article should have been “Rent-Control Measures Are Not Back Except in Maybe Three States Which Are Only 50% Democrat and Probably Won’t Vote to Ever Enact Them in Any Reader’s Lifetime” or better yet “Did You Know that State-Wide Rent Control Only Exists in Oregon After 100 Years of Availability – And That Oregon Currently Allows 15% Annual Increases So It’s of No Value to Anyone?”
Conclusion
The future of rent control is just simply about applying math and probability. Articles like this one by the Wall Street Journal – which used to be a fair and balanced publication – are simply designed to gain favor with left-leaning readers at the expense of those who have not taken the time to actually review the actual stats supporting the topic. State laws and political orientations make rent control a non-starter of biblical proportions. At this stage, you have about as much chance of passing “defund the police” initiatives (which are also still getting press with some media groups). Perhaps they could combine them into one bill and give that a shot?