Some local municipalities in the United States seek rent-control policies over property owners as a way to please their residents, because renters generally greatly outnumber owners in any local jurisdiction and thus cast the largest number of votes that can determine majority outcomes. When seeking rent control, these local governments are seizing upon the idea of electors “voting with their feet,” or the direction in which an outcome favors them most.
However, the Foundation for Economic Freedom, which teaches young people the personal value of free markets, entrepreneurship and strong character — as we similarly support here at the Jason Hartman Foundation — opined last week that any rent-control policies best lie within the chambers of state government, because local control “targets the property rights of owners who cannot protect themselves by voting with their feet.”
Gary M. Galles, a professor of economics at Pepperdine University and a FEE faculty member, wrote in that foundation’s report that a majority of states actually ban or restrict local governments’ power to impose rent control, but that currently those restrictions are under attack in at least four states — California, Oregon, Washington and Illinois.
Rent control, Galles says, transfers monetary gain only to one group: Those people who are renting at the time such a policy is adopted. However, “prospective future tenants, who will be harmed by the reduced supply of available rental housing that results, obviously cannot vote.” Others who will suffer, he says, are renters in neighboring jurisdictions whose costs will rise because of the reduced regional supply of rental units.
Galles calls rent control “piracy by local plebiscite.” He wrote:
That is why, unlike many other areas of governance, state-level determination of rent control policy may protect citizens’ rights and well-being better than local determination. Those who would be harmed get to vote at the state level. State-level determination allows owners who face robbery to more effectively unite against it.
