Should California Subsidize Housing with ‘Rent Stamps’?


Should California Subsidize Housing with ‘Rent Stamps’?

2018-12-07T14:35:43+00:00December 7th, 2018|Advocacy, Local Updates|

It’s time for the California Legislature to take a totally new approach to meeting the critical human need for shelter. The Legislature should consider approaches that neither impose the costs of this societal need on a subset of the real estate industry nor give its benefits randomly to those in need.

Shelter, like food, is something we all must have. Yet as a society we have approached meeting these two needs very differently.

Food is provided to the needy by federal programs such as Supplemental Nutritional Assistance (SNAP, formerly referred to as food stamps) and National School Lunch, among others, as well as by private charities. We don’t require food sellers, large or small, to offer one price to some people, and a lower price to others.

Shelter is provided to the needy by federal housing programs such as Section 8 subsidies and public housing projects. We also rely on rent control, but it differs dramatically from these others. It requires landlords to provide housing to some at a lower price than to others, irrespective of the size or profitability of the landlord’s business. And, unlike all other government assistance programs, we do not require that rent-controlled housing units go to those most in need. Or even in need at all.

Would you invest in the grocery business if you had to give some shoppers heavily discounted prices? Many real estate investors shun rent-controlled jurisdictions for the same reason.

Existing owners of rent-controlled housing can hardly be blamed for the deferred maintenance we see everywhere in San Francisco. And is it irrational for these owners to work the angles to benefit from today’s huge increases in rents? No. The legality or morality of such activities is a different question.

While there’s stigma and derogatory slang names for those who use food stamps, there’s no parallel pejorative for beneficiaries of rent control who can afford market rents — even for those who brag about their rent-controlled apartments while spending half their time at the home they own elsewhere.

Don’t get me wrong: Rent increase limitations have saved many people from eviction and displacement. But the rent-control system is entirely random: Those in place benefit, regardless of income or assets; newcomers moving in pay much more for identical housing even if they are (and will remain) low-income. Some tenants work all the angles by subleasing units for profit, getting roommates or tourists to pay all the rent and more (sometimes hiding lease-violating behavior from landlords). In short, new apartment seekers are just out of luck.

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