More Housing, Not More Red Tape: A Better Path for Providence

More Housing, Not More Red Tape: A Better Path for Providence

Providence, like many communities across the country, is experiencing a lack of housing choices for its residents. Just like with anything else, when supply and accessibility is limited, prices increase. This is why about 95% of economists agree, regardless of political affiliation, that policies like rent control do not work. Even renowned socialist economist, Asar Lindbeck, found that “rent control appears to be the most efficient technique presently known to destroy a city—except for bombing” (The Political Economy of the New Left, 1971). 

 

His statement provides clarity as to where both ends of the political spectrum should meet if we are being realistic about solving our housing crisis locally, beyond, and for the greater good. While housing policy requires a multifaceted approach, rent control is not a solution for our core issue - lack of supply.

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Not only does rent control not lower rents, it is a policy widely and repeatedly proven to negatively impact those it intends to serve, reduces existing and future tax base, redistributes tax burdens to single-family owner-occupied housing and other taxpayers, and prevents progress on real solutions. The administration and enforcement of rent control will cost millions and create the same bureaucratic structure that led Rhode Island to its housing crisis in the first place.

 

Recently, Providence has done a wonderful job implementing progressive zoning policies and streamlined permitting that are producing real results. In recent reports, Providence is outpacing both Boston and New York City in building permits per capita.

 

As a landlord, broker, and property manager, I am seeing the results in real time by way of reduced rental prices and increased incentives or negotiables. On the flipside, I have seen residents displaced because of recent harsh regulations that have spurred unplanned sales. This has significantly affected older and fixed-income populations who become displaced when new owners need to raise rents to cover high mortgages or when owner-occupants move in. A yearly anticipated rental increase (even at 4%) will be no different. More housing choice and less burdensome regulation would provide better results for all parties on all sides of these transactions. Rent control will substantially reverse any positive momentum. Make no mistake - you cannot cut red tape and stick it somewhere else.

 

Rather than opting for rent control, which creates a triple threat - reduced housing stock, increased prices, and destruction of the tax base, Providence must invest in proven strategies. With Providence’s aging housing stock, we must both increase housing production and invest in the preservation of existing housing stock. While market correction is the goal, we must also acknowledge that responsible investment in targeted means-tested rental assistance programs is a necessity in serving our most vulnerable populations. 

 

Every Rhode Islander has a stake in making sure our capital city is a vibrant place to live, work, and enjoy. We all provide a piece to that puzzle.