Rent “Stabilization” Is Another Word for Rent Control

“Newspeak” is a term from George Orwell’s dystopian novel 1984 by which a word means something other than what it says. For example, in newspeak “ungood” was substituted for “bad.” In 1984 it was a means of thought control. Our bureaucrats often use newspeak words like “revenue enhancement” instead of tax increase. People hate tax increases so government officials try to make it sound not so ungood. 

The majority of the Santa Barbara City Council is pushing forward with rent control but they use the newspeak term “rent stabilization.” “Stabilization” sounds much better than “control.” Who doesn’t want something stabilized? The opposite of “stable” is “unstable” and as we all know something that is unstable is bad. 

I get that people renting apartments would like to have rent control. Rents have gone up a lot recently as the councilmembers pointed out. None of the councilmembers supporting rent controls actually discuss why rents are going up. And the majority Councilmembers (Harmon, Gutierrez, Santamaria, and Sneddon) who are pushing rent control really don’t care about the why. They just want to put the lid on rent increases, damn the consequences. I know they have heard all the arguments why rent controls are a bad idea but politics gets in the way of reason. And they are all about politics.

One of the main reasons rents are so high here in beautiful Santa Barbara is that everyone wants to live here and there aren’t enough apartments to go around. I just counted the number of apartments for rent in the City. Only 81 for a population of 87,000. The vacancy rate is very low, about 2.0% to 3.0%. 

Why are there so few apartments relative to the population? Because: 

-City building requirements and the planning process make it difficult to build here.

-Land and building costs are much higher here.

-The threat of rent control deters developers from building.

The bottom line is that Santa Barbara is seen as a tough place to build.

The problem with rent controls is that in the long run they make things worse for renters. Everywhere rent controls have been implemented have resulted in a reduced supply of housing (no one moves), have made it more difficult for low income renters to find and qualify for rentals, existing housing deteriorates as rents can’t cover costs (depending on the ordinance), higher income renters generally end up as the tenants, and a new expensive bureaucracy is created to enforce the ordinance. I’m not making this up. There are many well-documented studies to support this.

Why have rents increased so much? Aside from the fact that we don’t have enough apartments, operating costs have gone way up for apartment owners. From my own experience with commercial real estate, insurance costs for example have tripled in the last five years. Inflation, tariffs, interest rates, labor, maintenance, and materiel have all gone way up. It costs money to run a property.

This is not the fault of landlords, yet they are blamed for trying to make money owning rental property. Investing in real estate is not a charity or public service for tenants. Just try it. It’s not so easy. 

The housing problems here are homemade. If you want to cast blame, blame ourselves. We have a city that is not Los Angeles and we wish to keep it that way. We support building restrictions to keep our Shangri-la quaint. We don’t like “progress” and we vote in politicians who promise to keep it that way. 

So if we are to blame landlords, and rents go up because of a lack of supply, and if apartment owners need to make a profit to keep up with costs they can’t control why are we punishing them? This is a social problem not a greedy landlord problem. If we force landlords to subsidize renters then we are shoving society’s responsibilities onto their backs instead of ours. Is that fair? Obviously not. If we were honest we would tax ourselves to fund rent subsidies. But we’d rather blame landlords.

This is why rent controls are pernicious. We have leftist politicians who haven’t a clue about economics or the results of rent control. They think they can just pass a law, buy votes, and everything will be wonderful. Yet it is those who benefit today from rent controls who will eventually suffer the consequences of these failed policies. But our politicians just don’t care.