If you’ve lived in an older apartment in LA for a while, you’ve probably had an experience like this: something happens in your life that makes you want to move, but you don’t, because you know you wouldn’t be able to find a comparable apartment for similar rent.
That “something” could be lots of things, like a new job that’s further away, a significant other moving in, a child being born, or an elderly family member moving in. Or maybe you have really noisy upstairs neighbors or a terrible landlord that does minimal maintenance and repairs. Whatever the motivation, you ultimately don’t move for one reason: LA has rent stabilization for older (pre-1978) buildings, so if you’ve been in the same apartment for a few years, you’ll have to pay more or accept a worse apartment. In a city that’s short on housing supply, rent stabilization does create affordability, at least for people who already have apartments.
Now, imagine a city that has what Austin boosters call abundant housing – a city that produces enough housing to be affordable and welcoming to everyone. In a city like that, with broad affordability, you’re much more likely to be able to find a new apartment that suits your needs.
The difference is clear: rent stabilization without housing supply creates affordability that constrains you. Abundant housing creates affordability that liberates you. It makes it easier for you to move, easier for your friends to move here from somewhere with less opportunity, easier to convince workers for your business to move here. LA’s deficit of affordable housing will take years to erase, which necessitates short run policies, but in the long run, abundant housing creates more opportunity for more people.
Is rent stabilization still necessary in a city with abundant housing? Maybe, because it has local effects that are, well, stabilizing. Abundant housing will keep housing prices in check at the regional level, but market changes might still create local impacts. For example, if a new transit line opens and makes it easy to commute to job centers, the relative desirability of neighborhoods at the stops will increase. This could cause a local jump in rents (offset, we suppose, by stagnation of rents in neighborhoods that have become relatively less desirable). Rent stabilization would alleviate local impacts – the micro stories of things like seniors getting evicted from long-time homes and communities. If landlords have the ability to buy out rent stabilized tenants, this lets tenants share in the passive increase in land values – which, after all, landlords have also often done little to earn.
Of course, rent stabilization might not be the best policy tool for addressing local impacts. Rent stabilization is easy to administer, but it is very blunt, because it applies to everyone regardless of need, creating subsidies for people that don’t deserve them. An upper class professional living in a rent stabilized building in LA will receive the same subsidy as a minimum wage worker, a system that makes no sense from a social policy perspective. An alternate system might offer a pre-funded rent allowance tax credit to low income households, scaling down to zero as income increases.
In any case, abundant housing is the right long-term policy to create a city that is affordable and welcoming to everyone. Broad affordability creates the most opportunity for the most people, and lets social policy be targeted at those most in need.