It has been the battle of Who’s-Right? among researchers seeking a definitive answer to alleviate California’s seemingly non-stop housing crisis: How do we prevent displacement and is rent control an answer?
Within Long Beach, the hopes to have a local initiative ultimately failed (and even worse, speculation that the recent flurry of rent increases were prompted by property owners having to contend with rent control, flooding their bank accounts with extra cash despite the initiative never making it to the ballot).
Shortly after two papers were released—one from Stanford economists, another from a UC Berkeley economist—arguing that rent control hinders accessibility to affordable units while exacerbating gentrification and displacement, another study has taken a closer into the immediate effects of rent control.
And argues that these controls are desperately needed.
“Housing insecurity, unmanageable rent increases, and the threat of displacement carry deep consequences, since having a home is about more than just having shelter,” said Nicole Montojo, co-author of the study and Housing Research Analyst for the California Community Partnerships Program at the Haas Institute. “Home is a locus of opportunity—it shapes the access people have to good schools and jobs, clean air, safe neighborhoods, and upward mobility. In other words, a stable, secure home is essential to human health and well-being.”
Differentiating itself from the previous studies—rent control, historically, has long been criticized by economists on both the right and left despite the fact that the list of theoretical harms often aren’t observable in reality—this study looks at the question of belonging and data-fies it: Who has the ability and right to stay within their community? Who does California belong to?
“The key policy question is: Can we protect overburdened renters from exorbitant rents and displacement while also increasing the needed supply of housing?” Montojo said. “And we believe the answer is yes.”
Right now, the market is creating instability for renters: 54 percent of Californian renters—about 9.5 million residents—are rent-burdened, meaning that they spend 30 percent or more of their income on rent. That’s an alarming increase of over 3.4 million rent-burdened tenants since the year 2000. Then we have lack of proper wage compensation: 23 million jobs, or 73 percent of all jobs in California, do not provide enough compensation for workers to afford rent in the current market.
“Low-income renters bear the greatest burdens,” Montojo said. “In order for a minimum wage worker in California to afford a two-bedroom apartment at fair market rent, they would need to work 119 hours per week—the equivalent to three full-time jobs—putting affordable housing simply out of reach.”
Add onto this homelessness and you have a disaster: California leads the union with the highest homeless population—around 134,000 folks on any given night—of which it saw a 14 percent increase between 2016 and 2017 alone.
All of these issues, not coincidentally, fall disproportionately on communities of color.
With a lack of serious public housing funding, rent control may be one of the best, and cheapest, ways to protect low-income families. It can stabilize rents for existing tenants, improve affordability for tenants in the future, and preserve the existing affordability of housing that may otherwise become unaffordable, according to the study.
“The crisis threatens our collective ability to thrive, our progress, and vision for a fair society—the very core of what makes California what it is,” Montojo said. “It raises the question of how we can create true belonging—structural inclusion where institutions and policies meet and are responsive to people’s needs.”
Support our journalism.
Hyperlocal news is an essential force in our democracy, but it costs money to keep an organization like this one alive, and we can’t rely on advertiser support alone. That’s why we’re asking readers like you to support our independent, fact-based journalism. We know you like it—that’s why you’re here. Help us keep hyperlocal news alive in Long Beach.