Rent Control = Less Affordable Housing
SB 99, sponsored by Senator Linda Lopez (D-Bernalillo) and Representative Patricia Roybal Caballero (D-Bernalillo) sought to repeal a state law adopted some 30 years ago that precludes local governments from imposing rent control. The committee tabled the bill on a bipartisan vote of 6-2. The bill was brought in response to significant rent increases and the acknowledged housing shortage, especially in Bernalillo County. The issue is crystal clear – will rent control work – will it hold rent increases down and result in more affordable housing?
The answer is pretty crystal clear – no. Why? Because it’s basic economics. There are too many people chasing too few housing units. Any economist will tell you that will result in higher prices until the balance of supply and demand reaches equilibrium. If supply exceeds demand, then prices will fall.
So how did we get into the housing shortage situation? Part of the answer lies in the COVID-19 pandemic. Units weren’t being built. A lot of people have moved to Albuquerque because new jobs have been created through things like the Amazon facility, the Intel expansion, etc. And, 40-year-high inflation that has driven the cost of building materials sky-high affects existing rentals too when it comes to replacing a furnace or re-roofing a dwelling.
The Chamber stood firmly in opposition to this measure, offering the following statement:
The challenges of inflation and high rent are real – but they require the right fix. The wrong solution could worsen the situation, or even create new problems. And since we’re not the first state to contemplate this, we should look to other states’ lessons. Oregon implemented a statewide rent control policy in 2017, and a recent study showed the state lost 14% of their rental housing following that. LOSING rental inventory – when we’re already short tens of thousands of units? That’s the wrong direction, and something we can’t afford in New Mexico.
High rent is a problem, but here, it’s also the symptom of a bigger problem we need to solve first: We have a housing supply issue. It’s something our state and local leaders are aware of and working toward through new and existing incentives for developers and other funding mechanisms. We know there’s no time to lose, and we’re pushing to accelerate these efforts. But allowing rent control will take us backwards, and we urge you to oppose SB 99.
The committee acted wisely in favor of spending time on other legislation that offers the prospect of addressing the need for affordable housing on a statewide basis. Well done.