Expanding Rent Control Will Not Make Housing More Affordable for the Disabled

Advocates unconvincingly argue that repealing California's limits on rent control will open up more housing for people with disabilities

By Christian Britschgi of Reason. 

"Rent control proponents like to argue that the policy will make housing more affordable. Now they're claiming it will also make it more accessible to people with disabilities.

That's the thrust of a new article from Mother Jones reporter Julia Métraux, who writes that California's state-level limits on local rent control policies "increasingly limits disabled and aging people's ability to get accessible, affordable housing—practically impossible on a fixed income."

On the ballot this year is Proposition 33, which would repeal those state-level limits. Disability advocates tell Métraux repeal would be a huge win for disabled tenants' ability to afford housing that's accessible to them.

Would it?

Neither Métraux nor the activists she interviews quite explain how that would work.

The basic argument appears to be that new housing is more likely to be accessible to those with disabilities, but California's Costa-Hawkins Act (which Prop. 33 would repeal) forbids localities from imposing rent control on newer housing units.

By repealing Costa-Hawkins, cities could use rent control to drive down the cost of newer housing, thus making it affordable for people disabilities.

There's a surface logic to this argument, but doesn't really make sense once one starts to walk through the mechanics of it.

For starters, rent control policies typically don't involve literally setting rents but rather limiting annual rent increases.

But if existing housing is already too expensive for people with disabilities, then limiting the rate at which it gets more expensive won't do them any good. Housing that's already unattainable will just grow increasingly unattainable at a slightly slower rate.

Should Prop. 33 pass, it would be legal for cities to require that new, handicap-accessible housing be offered at below-market rates from the get-go. On paper, that would make such units more affordable to disabled people.

A city that did adopt that policy however would effectively kill off new construction. Developers aren't going to build money losing, below-market-rate units out of the goodness of their heart. They would require subsidies to build affordable housing.

And Prop. 33 would do nothing to increase subsidies for affordable housing construction.

To be sure, there's also nothing about the status quo that prevents localities from offering (or increasing) subsidies to developers to build affordable, disability-accessible housing.

The net effect of repealing Costa-Hawkins and rent controlling new, unsubsidized housing is that few accessible units would get built. That would reduce housing options for disabled people who can currently afford newly built units.

In some extreme cases, localities have used rent control to cut legal rents. It's possible some California localities would try to do that following a repeal of Costa-Hawkins. Theoretically, they could make some pricy, accessible units affordable to more disabled people, but cutting rents on existing units would also make those units more affordable for everyone, therefore increasing demand for them. Disabled people would have to get in line with everyone else competing for newly affordable units that are in short supply.

When price controls create shortages and queues, producers manage that queue by using things other than price to discriminate against potential buyers.

Literal discrimination against people with disabilities is illegal. But it's eminently likely that landlords would use other, legal means of discrimination to manage the queue—say by requiring higher credit scores. Disabled people who already have a hard time affording housing wouldn't fare any better under that system.

Rent control already makes rental housing markets work less well for everyone. The research is unambiguous that where the policy drives rent down below market rates, landlords provide less rental housing (either by building less or converting units to owner-occupied housing) and invest less in the rental properties that do stay on the market.

Giving cities carte blanche to expand rent control would only make these problems worse. Disabled people who struggle to find housing now would suffer along with everyone else."