Olympia keeps treating a housing shortage as a pricing problem. It is a supply problem. When the state tells property owners what they may charge for rent by implementing rent control, fewer units come to market, existing buildings get less maintenance, and the next tenant pays more, or never finds a unit at all.
New York is the longest-running American example of rent control. After the 2019 Housing Stability and Tenant Protection Act tightened vacancy rules and limited how owners recoup renovation costs, regulated buildings lost value and owners left tens of thousands of rent-stabilized apartments empty rather than rehab them at a loss. Industry and city estimates put those “ghost” units around 50,000 to 57,000. In 2026 the mayor-appointed Rent Guidelines Board froze increases on roughly one million stabilized apartments even as operating costs kept rising. A freeze is popular with sitting tenants. It does not add a single apartment. It makes the next vacancy harder to fill and the unregulated remainder of the market tighter.
On one hand the government fixes rents, on the other, it increases taxes and fees. Eventually the fees are higher than the rent and the rental unit disappears from the market.
Washington Democrats walked the same path. After earlier rent-cap bills such as HB 2114 failed, the 2025 Legislature passed HB 1217. Governor Ferguson signed it. The law caps most residential increases at 7 percent plus inflation, not to exceed 10 percent, bars rent increase in the first year of a tenancy and puts a 5 percent cap on manufactured-home lot rents. That is rent control with a softer label. Costs that are not capped, insurance, taxes, repairs, vacancies, energy-code upgrades, still show up. Property owners either raise the starting rent on the next lease, defer maintenance, convert to owner occupancy, or leave the business. New construction gets a temporary exemption.
Argentina ran the experiment in reverse. For years the rental law forced three-year contracts and state-set annual adjustments. Owners prepaid inflation into the first month’s rent and pulled units off the long-term market. In December 2023 President Javier Milei’s DNU 70/23 repealed that law and let parties set term, currency, and adjustments. Listings surged, on the order of 150 to 340 percent in the first year, depending on the source and unit type, and inflation-adjusted asking rents fell sharply, on the order of 24 to 40 percent from late-2023 peaks in published series. That is what happens when property owners are allowed to rent again.
The economics are not mysterious. A cap on the legal price does not cap the cost of providing the unit. If the legal rent is below the cost of keeping the unit in service, the unit drops from the market. Sitting tenants may enjoy a below-market lease. Newcomers, young workers, and anyone who needs to move face a thinner market and higher asking rents on whatever is left. Brookings and other reviews of rent regulation keep finding the same pattern: short-run relief for incumbents, less rental supply over time.
Washington’s answer should be more housing, not a price board. Cut the mandates that already add a large share of the cost of a new home. Speed permits. Stop stacking energy, fee, and landlord rules that make a small rental uneconomic. Argentina did not invent new apartments with a slogan. It stopped punishing people for offering them. New York is still punishing them. Olympia should stop copying New York and then not act surprised when the vacancy list gets longer and the rent on the open unit does not fall.
