Economists Agree: Biden’s Rent Control Idea Would Lead to Housing Shortages, Higher Prices
17th July 2024
Economists are railing against President Joe Biden’s plan to impose rent controls on nearly half of the nation’s rental market as a ham-fisted election year ploy that would disincentivize building new housing and make it more difficult for Americans already struggling to pay their rent.
Biden on Tuesday unveiled his nationwide rent control plan, which would strip federal tax breaks for corporate landlords with more than 50 units who increase rents by more than 5 percent annually. The White House is promoting the plan as an anti-price-gouging measure to stabilize rents, which have ballooned 22 percent since Biden took office, that would last for only two years. But economists who spoke with the Washington Free Beacon said the Biden administration can’t spin its way out of the fact that the policy would almost certainly exacerbate housing shortages and ultimately increase prices for renters.
“Most economists would agree that it’s a pretty bad idea because it has many unintended consequences,” said Tobias Peter, the co-director of the American Enterprise Institute’s Housing Center. “Rents are high because there is more demand than there is supply. And so the solution is not to cap rents, the solution is to build more housing so that rents would naturally come down.”
Imagine that.