2019 Leg Session, Denver, Housing, Land Use, Legal, Original Report, Property rights, Scott Weiser, Uncategorized, Urban Renewal, Zoning

Legislation proposes unlimited rent control authority for local governments

DENVER— Legislation sponsored by 11 Democrats to repeal Colorado’s prohibition on rent control was introduced April 1. Senate Bill 19-225 cites rising rents in metropolitan areas and a lack of affordable housing as reasons driving low-income people into surrounding communities that, according to the bill’s legislative declaration, are ill-equipped to handle the influx.

The bill says “the General Assembly intends to give local governments an additional and meaningful resource to expand the supply of affordable housing in their communities and to enable low-income and working-class residents to live in the communities in which they work.”

The bill’s prime sponsors include Sen. Julie Gonzales, Sen. Robert Rodriguez, Rep. Susan Lontine and Rep. Serena Gonzales-Gutierrez, all Denver Democrats.

Colorado prohibited rent control in 1981. That law forbids local governments from “enacting any resolution or ordinance that would control rent on private residential real property or private residential housing units.”

New York City has had rent control for decades, with the result often being decaying, decrepit housing that landlords are unwilling to maintain or upgrade because of the inability to raise rents to pay for the improvements.

NYC South Bronx circa 1970

The New York Times Magazine reported in 2013 that, “The absurdity of New York City’s housing market has become a standard part of many Econ 101 courses, because it is such a clear example of public policy that achieves the near opposite of its goals.”

Citing Columbia Business School housing economist Christopher Mayer, the article says, “For Mayer, as for many economists, this is proof that rent regulation is an incredibly expensive program, preventing billions of dollars of development.”

Ryan McMaken, Senior Editor at the non-partisan Mises Institute, a free-market education and research organization said, “Everyone who’s studied it empirically can see that it reduces the number of units actually available. Rent control is anti-poor person.”

McMaken says that rent control does the exact opposite of what the sponsors of the legislation intend; it increases rents for free market housing while only benefiting a small number of lucky people who manage to get into rent controlled housing. “What they don’t see is the thousands of people who have to move farther away,” said McMaken.

The bill would allow a government to place permanent rent-control deed restrictions or other controls on any private residential property, with the potential consequence of a slowdown in development due to reduced future profitability.

“This isn’t rocket science,” says McMaken. “They don’t want to allow more housing. Either the voters or local governments want to enhance their own property values. They say ‘oh, we’ll put the problem on someone else through rent control’ meanwhile continuing to benefit themselves by keeping home prices high.”

There are no restrictions or limitations in the legislation on how or to what extent a local government can impose rent control.

The bill says only “a local government may enact and enforce any ordinance, resolution, agreement, deed restriction, or other measure that would stabilize rent on either private residential property or a private residential housing unit.”

The bill is assigned to the State, Veterans, & Military Affairs Committee. No hearing has been scheduled as of press time.

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