Rent control sounds good on paper: limit how much landlords can raise rent, and you protect tenants from skyrocketing costs. But in reality, rent control almost always backfires.
As a real estate investor, builder, and someone who has seen both sides — from the permitting desk to the construction site — I can tell you that rent control creates long-term harm for the very people it's meant to protect.
The Economics No One Talks About
When cities impose strict rent caps, they distort basic supply and demand. Developers and builders — the people who actually create new housing — see the writing on the wall: limited returns, unpredictable political risk, and endless regulation.
So, they stop building. Or they build somewhere else.
Fewer new units means less supply, and less supply means higher rents for everyone not lucky enough to live in a rent-controlled unit. In cities like Los Angeles or San Francisco, this dynamic has played out for decades — freezing parts of the housing market in time while driving new development costs through the roof.
Rent Control Creates Two Classes of Renters
Rent control divides renters into two groups:
The Protected: those who got in early and benefit from artificially low rents, often staying in the same unit for years.
The Locked-Out: everyone else.
The second group — usually younger families, recent graduates, and new arrivals — end up competing for the tiny share of non-controlled units. Those units command sky-high rents because they have to subsidize the reduced profits from controlled stock.
The result? The new generation pays the price.
Maintenance Suffers, Too
When property owners can't adjust rents to match inflation, taxes, or construction costs, maintenance budgets get cut. That leads to worse housing conditions, deferred repairs, and unsafe living environments — exactly the opposite of what policymakers intend.
Rent control makes older buildings decay faster while discouraging owners from reinvesting in upgrades or energy efficiency improvements.
Political Instability Scares Off Builders
Developers invest millions — sometimes hundreds of millions — into projects that take years to design, permit, and build. If they sense that a city council might suddenly change the rules or extend rent control to new construction, it introduces political instability that makes financing nearly impossible.
Banks and investors don't like uncertainty. So the money moves elsewhere — to cities or states that welcome new housing rather than punish it.
What Actually Helps Renters
If we truly want to lower rent and increase affordability, the answer isn't price controls — it's more housing.
That means:
- Fast-tracking permits and approvals
- Reducing unnecessary plan checks and red tape
- Encouraging ADUs, duplexes, and infill development
- Rewarding energy-efficient, high-density design
- Creating predictable, pro-growth zoning policies
When supply catches up to demand, prices naturally stabilize — without distorting the market or punishing those willing to build.
The Bottom Line
Rent control is a short-term political fix that creates long-term economic damage. It traps renters, scares away developers, and erodes the quality of existing housing stock.
If California and other states want affordable housing that actually lasts, they need policies that attract builders, not chase them away.
Because in housing, you can't control your way to affordability — you have to build your way to it.