Key Findings

1. Washington state came as close as ever to state-wide rent control during the 2023-24 legislative session and its promoters will likely be back in the next session with another rent control proposal.
2. Supporters of the proposed rent control legislation misleadingly labelled their bill “rent stabilization” in a transparent attempt to avoid constitutional prohibitions against rent control and to sidestep negative reaction to rent control.
3. Rent control has failed globally to improve housing affordability as it disincentivizes investment in, creation of, and maintenance of rental housing.
4. Rent control ignores supply/demand dynamics and thereby would exacerbate housing affordability and homelessness crises in Washington state which are caused by a combination of restrictive building regulations and rapid population growth.
5. Some supporters of the rent control bills openly promote rent control as a step towards a radical socialization of housing in the state.
6. Immediately freeing housing development and management from onerous state and local regulations around zoning, growth management, and other restrictions on supply is the only solution to the housing crisis.

Summary

In 2024 the Washington state legislature nearly passed a bill to impose rent control statewide. The house passed HB 2114, but the companion bill, SB 5961, died in committee in the senate. The bills would have capped rent increases on existing rental properties at no more than 5% in a 12-month period with exemptions for rental units that are less than 10 years old. Both bills would have allowed rent increases without restriction for new tenants.

Calling the concept “rent stabilization”—based on allowing those uncapped increases for new tenants--was an attempt by the bill’s promoters to get around state legal prohibitions on rent control while also attempting to soften harsh reactions some might have to the concept of rent control.

Nevertheless, the core purpose of the bill was to impose statewide rent control and rent control in most other states includes such provisions exempting new buildings and new tenants and is still called rent control.

The lack of affordable housing and the high homelessness rate in Washington are indisputable, but HB 2114—like any rent control scheme—failed to address those issues at every level. It failed to solve the core causes of the problems. It ignored and then violated basic laws of economics. It served as a Trojan horse for far more radical and damaging policies that are sought by fringe political groups. It distracted from efforts that could effect real solutions. It violated property rights. It violated rights to contract freely.

In exchange for the expedient of locking in low rent increases for existing tenants willing to stay in their current rentals beyond the term of their current lease, rent control measures such as HB 2114 exacerbate the problems they claim to solve.
They do nothing to address the primary cause of the housing unaffordability crisis, which is restrictive housing development regulations in the face of rapid population growth.

Rent control measures do nothing to incentivize the creation of new housing stock and additionally reduce housing availability. Increases in broader housing unaffordability and homelessness rates are the Faustian bargain rent control advocates inexplicably propose in exchange for their unwillingness to look at the big picture.

Why is rent control—a demonstrable failure in terms of improving housing affordability in every city where it has been employed being considered at all in Washington when a regulation-induced supply shortage is the main problem? Forces opposing a free market in housing development—including NIMBYism, central planning enthusiasts, and radical political movements—along with a poor understanding of economics among many lawmakers stand in the way of burying the foolhardiness of rent control once and for all.

The housing crisis exists because of crushing government restrictions on allowing a healthy housing development market to function. Rather than pursuing the nonsensical and failed idea of rent control, officials at all levels of government should focus on eliminating supply restrictions which have for decades suppressed the amount of housing stock required to meet the demand from a rapidly growing population. Local policy makers should do it now and not wait for another counterproductive stab at implementing rent control by the state legislature next year.

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