Rent Control
Wisconsin’s urgent need for all types of housing from single-family to multi-family units, has created affordability challenges including rising rents. As a result, some communities are considering rent control as a potential solution.
What is Rent Control?
Why Does Government Enact Rent Control?
Rent control is often a response by communities experiencing rapid rent increases to protect low- and middle-income tenants arguing it stabilizes housing.
Does Rent Control Work?
No. In fact, rent control hurts those it is intended to protect.
What is Wisconsin law?
Wisconsin law currently prohibits municipalities from enacting rent control policies.
What is the most effective solution to rent control?
The best solution to addressing increasing rent and housing prices is to CREATE MORE HOUSING SUPPLY.
Why Rent Control Falls Short as a Solution
Reduced Incentive for Landlords: Rent control can discourage property owners from maintaining or improving their properties, leading to a decline in housing quality over time.
Limited Housing Supply: By capping rents, rent control can deter new construction and investment in rental properties, exacerbating housing shortages in the long run.
Market Distortions: Rent control can create artificial market conditions, leading to mismatches in supply and demand. This can result in fewer available rental units and increased competition for those that are available.
Inequitable Benefits: Rent control often benefits current tenants at the expense of new renters who may face higher market rates, creating a divide between those who secure controlled rents and those who do not.
Administrative Challenges: Implementing and enforcing rent control can be complex and resource-intensive for local governments, requiring ongoing oversight to prevent abuse and ensure compliance.
Economic Effects of Rent Control
Reduced rental housing: Rent control can reduce the number of rental properties available, which can make it harder to find affordable housing.
Lower quality housing: Rent control can reduce the quality of existing rental properties.
Higher rents elsewhere: Rent control can lead to higher rents in uncontrolled areas.
Reduced mobility: Rent control can reduce mobility because tenants are less likely to move to find better housing or jobs.
Who Suffers from Rent Control
Landlords: Rent control makes it more difficult for landlords to cover maintenance costs and make investments in their properties. Landlords may respond by reducing maintenance, converting rental properties into owner-occupied homes, or building fewer new rental units.
Small landlords: Small landlords may be especially impacted by rent control because they have fewer resources to manage increased operational costs.
Economically disadvantaged families: Rent control can make it harder for families on a tighter budget to find new housing. In a difficult housing market, landlords can use factors like income and credit history to choose tenants, which can bias the selection process against those individuals with lower incomes.
Alternatives to Rent Control
Increasing housing supply: Encourage the construction of new rental units by streamlining zoning regulations, providing incentives for developers, and forming public-private partnerships.
Housing subsidies: Provide direct financial assistance to lower-income households to help them afford housing at market rates. For example, Section 8 is a federal program that pays the difference between a tenant’s income and the market rate of their rent.
Housing vouchers: Allow tenants to choose their housing based on their needs and preferences.
