Why rent control is wrong for Chicago
Despite ongoing efforts to address the nation’s workforce housing crisis, it remains a critical issue in 2019, leading to a renewed push for rent control. Last month, Oregon enacted our country’s first statewide cap on rental increases. However well-intended, these policies have been proven to fall short of expectations and in most cases do more harm than good.
The specter of rent control is looming large for Chicago. Gov. J.B. Pritzker has been outspoken in his support to repeal Illinois’ 1997 law banning rent regulations. Chicago mayoral candidate Toni Preckwinkle also backs the repeal, while her competitor, Lori Lightfoot, has not taken a formal position despite running ads that mention the challenge of rising rents. At the grassroots level, activists have been calling for rent control in gentrifying neighborhoods where long-term residents are being priced out. In nonbinding referendums in last month’s elections, residents in four wards voted to end the rent control ban.
Yet there are compelling arguments not to allow rent control in Chicago that Chicago’s business community leaders—and all residents—need to hear and understand. As Marcus & Millichap documented in a recent report, more than 30 years of studies in cities such as New York, Los Angeles and San Francisco show that rent control does not solve the workforce housing crisis, and in fact it tends to make it worse. As economist Thomas Sowell has written, “The goals of rent control and its actual consequences are at opposite poles.”