April 21, 2023
A foolish State Senator in NC introduced a bill that would “allow” local municipalities to enact “rent control.”
Currently, NC is one of many states that prohibit rent control. See Chart. Notice that only 5 states (Democrat lead) currently allow rent to be controlled by local governments.
Rent control allows cities to dictate what a landlord can charge a tenant for rent.
In the study of Economics “rent control” is a form of Price Ceiling. That concept means the price of a product or service is controlled by a government. The government sets the price, below the market, and not subject to laws of supply and demand. This is, of course, tampering with the free market.
Landlords take on all the risks, borrowing money at floating interest rates, hiring builders, insuring the property, attracting renters, issuing contracts for rents/leases and collecting rent payments. Landlords also bear the risks of unpaid or late rent payments. They also are responsible for all repairs and upkeep.
“Rent Control” means the landlords would be limited as to what level of return they can receive for their investment and the risks. All notable economists know that price ceilings always lead to a decline in supply. Investors stop building rental property. They are unsure if they can cover all their costs and risks. Period.
For NC, rent control is a very bad idea.
High Truths and Low Lies 