New Research on Housing Affordability and Rent Control

Posted By: Jim Wiard (deleted) Articles,

Washington continues to grow. Our state’s population has exploded by 12 percent in the last decade with no sign of slowing. By 2030, Washington needs nearly 10,000 new apartment homes built annually in addition to other housing types so that everyone who needs a home can access one they can afford. Meanwhile, we must support current residents so they can continue to live in their homes and communities.

Partnership for Affordable Housing

The Partnership for Affordable Housing is a 501(c)4 nonprofit, formed out of a strong and shared interest to come together to provide fresh ideas and solutions to providing a wide range of housing options for all Washingtonians.

Like many other parts of the country, Washington state’s rapid growth presents significant challenges. The coalition takes a proactive approach to address housing affordability in the state and is focused on the following principles:

  • Support the creation of all types of housing that meets the needs of every Washington resident.
  • Enact new policies that help residents to stay in quality, affordable housing for the near and the long term.
  • Give local communities more tools to keep housing affordable.

Policy Solutions We Can Work on Together

Washington needs to create more housing that meets the needs of people of all income levels. Rent control does the opposite. Rent control reduces housing creation and will make Washington’s housing crunch even worse.

Instead, Partnership for Affordable Housing supports effective solutions that will address the immediate need to help residents remain in their homes and communities while laying the groundwork for the creation of more housing for everyone.

  • Provide rental assistance for residents in need: A community fund that helps residents remain in their homes in both short and long-term instances.
  • Create multifamily tax aid: Property tax exemptions for housing providers who keep rents below market rates to maintain quality, affordable housing.
  • Build public/private partnerships: Partnerships between government and the private sector that create a range of housing that fits the needs of more people.
  • Increase and expand the Washington Housing Trust Fund: State created program to fund affordable housing projects through a competitive process throughout the state.
  • Support Local Housing Levies: Jurisdictional programs that develop and preserve affordable housing and/or provide direct assistance to families at immediate risk of eviction and homelessness.

New Research on the Impacts of Rent Control

Partnership for Affordable Housing has commissioned ECONorthwest, a respected economic consulting firm, to conduct independent research on the effects of rent control on housing affordability.

The research concludes that rent control would have significant negative impacts on housing in Washington. Rent control does nothing to address Washington’s underlying housing challenges.

The evidence shows the counter-productive effects of rent control.

According to the report:

  • Rent control would reduce housing production, resulting in housing scarcity.
  • Rent control can lead to poorly maintained housing.
  • Rent control can lead to lower resident mobility.
  • Rent control can lead to an inefficient allocation of housing.
  • Rent control would reduce property tax revenue by $750 million over ten years.
  • Rent control would reduce sales tax revenues.

Cumulative, numerous policies that delay new development of housing can drive up costs and reduce overall supply. Rent control would further impact development feasibility, resulting in reduced housing supply and increased housing costs.

Modeling the Impacts of Rent Control

National Apartment Association has recently published research on the impact of rent caps on four cities: Seattle, Denver, Chicago and Portland.

Rent growth caps affect the apartment industry in several ways, each of which is estimated in the model.

The analysis of the model outputs concluded:

  • The expected change in rental values across metropolitan areas ranged from 2 percent in Chicago to 9 percent in Seattle. The effect on new apartment construction would also be substantial but it varies significantly across metropolitan areas. Seattle would see a reduction in construction of 1,739 units per year, or 20,868 apartment units by year 2030.
  • The models estimate that annual maintenance spending would fall by $5.9 million in Seattle. 46,085 units would be at increased risk due to decreased maintenance through 2030.
  • The total rental income lost for apartment owners would be significant. The model estimated that total annual income loss would be $33 million in Seattle.
  • If property value losses are realized in the assessment of property, then they would also be realized by lower property tax collections.
  • Taking the property loss estimates and assuming that property assessments follow market value losses, annual property tax revenue losses would be more than $5 million annually in Seattle.

Housing development, rehabilitation and property maintenance generate significant economic benefits in terms of job creation and wage growth, and overall economic value to the state economy. Rent control policies eliminates most of this benefit as development, renovation and rehabilitation of rental housing activity is significantly reduced or eliminated.

Housing Underproduction in WA State

In a new research report from Up For Growth, a coalition of stakeholders who believe that communities should grow for the benefit of every person, Washington state has underproduced housing by 225,600 units from 2000 to 2015.

This underproduction has created a supply and demand imbalance that has contributed to rising costs of housing.

According to the report, artificial barriers to increasing housing production to a level needed to keep up with demand include:

  • Zoning restrictions biased against high density
  • Escalating and misaligned fee structures such as impact fees
  • Poorly calibrated inclusionary housing requirements
  • Lengthy review processes

Legislative burdens have escalated the housing shortage leading to rental cost increases. Policy solutions to future housing imbalance include: creating incentives for localities to product more private sector housing; impact fee reform; expand funding for affordable housing; zoning reform; and increase public-private partnerships.

The state’s legislative session begins in January, and lawmakers will be proposing a myriad of bills, including many that work to address housing issues.

WMFHA will be working with our state legislators on these policies to ensure that they are equitable and do not lead to unintended consequences that might have the opposite effect as to their stated intentions. Grassroots advocacy is needed more than ever to preserve affordable housing in Washington and to avoid the costly impacts or poor legislation.


*Published in the January, 2020 Rental Housing Journal On-Site