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Can Rent Controls Solve the Housing Crisis?

A recent Ipso Mori poll, found that 71% of people supported the idea of rent controls. Many organisations such as Shelter, The Green Party, Generation Rent and Plaid Cymru also support the adoption of rent controls. Implementing laws that control rent is thought to be an effective way to alleviate poverty and homelessness.

When a government or local authority applies rent controls, they usually seek to limit the amount of money that landlords charge for rent. Legislation might also limit the amount landlords may increase rent when a lease or contract ends. It can also stipulate a minimum eviction notice period that a landlord must give a tenant when they seek to terminate a tenancy.

Areas where they have substantial rent control programs include Catalonia, New York, Berlin and Paris. In Catalonia, they have introduced a rent cap, this is calculated by using an average rental price for similar properties. New contracts cannot be above this average price. Rent controls are likely to be expanded throughout Spain, as the cabinet has recently voted for a new law to control rents charged by landlords who own ten or more properties.

Image by Marián Okál from Pixabay

Opponents say that rent control causes buildings to become run down, as the landlord has less incentive to spend money on the upkeep of the property. However, in the UK

some rental properties are substandard, and even dangerous, despite rents being high. They also say it can lead to less properties being available for rent. This is easily solved though, by implementing a house building programme alongside rent controls.

If you are on a low income and more vulnerable to the vagaries of the open market, then rent control can only be a good thing. To say that the free market can create a perfect solution, where rent prices will be controlled by demand, is naïve when you consider that rent prices have increased at a rate far above inflation in many regions. More and more people are realising that rent control is an effective way to make renting affordable.

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