Jimmy McMillan, a highly eccentric New Yorker, got 41,000 votes in 2010 when he ran for governor there as the candidate of “The Rent is Too Damn High Party.”

Sadly, at least for admirers of the politically exotic, McMillan “retired” last year, saying that despite tons of media attention, including a music video and a “Saturday Night Live” sketch, nobody cared about his cause.

Perhaps he should move to Portland, where rents have been climbing and people have been put out about it – sometimes literally, as in either evicted or forced to leave their rental units because the cost became unaffordable.

A Press Herald story Feb. 13 detailed the problems faced by some low- and middle-income city dwellers, noting that “Portland’s market-rate rent for a two-bedroom apartment, including utilities, has increased 40 percent in five years,” well beyond the rate of inflation.

At the same time, a newspaper survey last fall found the average renter’s income had fallen, making the affordability gap for rental housing even greater.

There’s no gainsaying the hardships involved. When people’s jobs or family networks are tied to a specific location, being able to live nearby is a necessity, not an option.

But important questions are being bypassed. While the discussion in the media so far has focused on passing laws to limit rents, few are asking what can be done to increase the supply of affordable housing – and what government’s role should be in achieving that end.

In the Portland area, the demand side of that question is hitting the supply side head-on.

Opinions may vary, but “rent control” laws are among the best-studied statutes in the economic field. We cannot ignore the real human needs they are designed to address, but it’s perfectly proper to ask whether there is reliable evidence showing that such laws are the best way of alleviating the problem.

As the story noted, rent control laws exist in a few states – Maryland, California, New York and New Jersey, along with the District of Columbia, were cited as examples. Some 35 states, however, legally pre-empt or prohibit local rent control ordinances, and it’s worth asking why they have done so.

Maine does not limit them, although so far no communities here have enacted any. Not surprisingly, most of their support comes from the political left.

Those supporters say the power of the state should be used to raise renters’ needs for housing to a higher legal status than the right of a private property owner to receive appropriate recompense for the use of his personal assets.

In this view, the social good is that renters can find places to live that are more affordable and achieve “stability” in their lives by not being forced to move when rents increase.

Those benefits come at a cost, however, and landlords are the ones who pay it. They may have invested considerable resources in their properties, only to be told that severe restrictions have been placed on the return they expected for their investments.

Thus, these laws essentially make private individuals de facto state employees against their will.

That’s not the only impact. Many studies say rent control statutes actually harm renters because they:

Decrease the housing supply by making it unprofitable to build new units.

Divert money that might have been invested in areas covered by rent control to housing in other cities or other types of development outside the scope of the laws.

Depreciate the quality of covered units by not providing enough revenue for landlords to undertake adequate maintenance.

As The Library of Economics and Liberty noted in its entry on rent control, “Economists are virtually unanimous in concluding that rent controls are destructive. In a 1990 poll of 464 economists published in the May 1992 issue of the American Economic Review, 93 percent of U.S. respondents agreed, either completely or with provisos, that ‘a ceiling on rents reduces the quantity and quality of housing available.’ ”

What’s the alternative? All too often, governments respond to the high cost of housing by restricting its profitability when they should work to increase it to spur more development.

Portland resident Sean Kerwin noted in a column Wednesday that improving public transportation and opening undeveloped areas to construction would make a big difference – as would activists’ acceptance of the results of city processes without initiating costly and time-consuming legal actions opposing them.

But there’s more: Cities like Portland, which, as Kerwin noted, have made some progress in permitting and public notice reforms, should be much more proactive in scouring their housing ordinances to eliminate unnecessary restrictions on new construction and the conversion of older dwellings to rental units.

Increase the supply, and the cost will drop. It’s Econ 101, but it can’t work if no one gives it a chance.

M.D. Harmon, a retired journalist and military officer, is a freelance writer and speaker. He can be contacted at:

[email protected]


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