We talked about it being considered, but now rent control is the law of the land in Oregon. In the past, rent control has been limited to certain cities, primarily in New York and California. But for the first time, an entire state has decided to drink this kool-aide.
Rents have been going up fast in Oregon and it’s not hard to understand why. According to the Wall Street Journal, for every 100 new households formed in Oregon, there has been only 63 new housing units built. Rising demand in the face of inadequate supply always results in higher prices.
So why aren’t the builders building more?
Government regulations designed to reduce urban sprawl and preserve land for farms and forests have resulted in sky high land prices and cities with nowhere to go. Take for example Bend Oregon. In 1990, the population was 20,000. Previous state legislation established an urban growth boundary limited to 20,600 acres. Today the population is 95,000 but available land for development is limited to only 24,000 acres. That’s about 75,000 people, nearly four times as many, competing for a 16.5% increase to land area of just 3,400 acres. No wonder prices are going up.
In other words, government regulation created this problem and now the regulators are going to step in to fix it with additional regulation. Rent control always results in decreased supply of new housing. While the ink is hardly dry on this new law, multi-family permits are already down 64% from a 2017 inclusionary zoning policy that forced landlords to rent 8%-15% of their units at below market rates. This new rent control meddling will precipitate further decline.
In the meantime, places like Dallas, Texas are surprisingly affordable and while Dallas has also enjoyed rapid household growth, housing cost have not sky rocketed, for one simple reason: In Dallas, the government will let you build.
If you want to stay in southeastern Wisconsin, we have just the right apartment for you, and affordable too! Where do you want to call home? Fox Lake? Hartford? Milwaukee? Racine? Decker apartments in all of these cities, and many places in between, all the way out to a brand new apartment complex in Madison. Give us a call, we’re right next door.
Also see “Insanity in Seattle – An Update”