Paolino: Rent Control Will Kill New Development in Providence

Paolino: Rent Control Will Kill New Development in Providence

Being in public service today is not easy. The demands are constant, and our neighbors are dealing with real challenges every day — jobs, health care, education, rent, and the rising cost of living. In Providence, the City Council — on which I once served — is well-intentioned and wants to help make life a little easier for its constituents. But by voting for rent control, it is prescribing the wrong medicine for the wrong illness.

Let’s start with a basic reality: cities and towns in Rhode Island rely primarily on property taxes, not income or sales taxes, to fund essential services. That means Providence must grow its tax base to remain strong and competitive. Every year, we should be encouraging more housing, more development, and more investment so that additional tax dollars flow into the city budget. That is how a city sustains itself and improves the quality of life.

Rent control moves us in the opposite direction.

By enacting rent control, the City Council has effectively sent a message to the marketplace: do not build in Providence. Investors and developers are not in the business of taking on more risk for less return. If they can go to another community — even within Rhode Island — where the rules are clearer and the economics are more predictable, they will. And when they do, Providence loses not only new housing, but also jobs, tax revenue, and long-term growth.

We do not have to speculate about what happens next — we can look at what has already happened elsewhere. In St. Paul, voters approved a strict rent control ordinance in 2021. The result was immediate: new housing construction dropped significantly as developers pulled back or shifted projects to nearby cities without those restrictions. Policymakers were eventually forced to revisit and scale back the policy because of its chilling effect on investment. That is the real-world consequence of well-intentioned but misguided policy.

At a time when we should be competing for investment, we are pushing it away.

If the goal is more affordable housing — and it should be — then the focus needs to shift to increasing supply and leveraging available resources. I am surprised the City Council has not been more aggressive in advocating for Providence to receive a significant share of the $125 million state housing bond. That is real money that could transform neighborhoods, revitalize blighted properties, and bring new housing online.

Why aren’t we demanding that those dollars be directed toward areas like the former St. Joseph Hospital site and other underutilized parcels across the city? Why aren’t councilors calling in the state housing secretary and pushing for a coordinated plan to invest in Providence?

That is how you create affordable housing: you build more of it, and you use public dollars strategically to unlock private investment.

Instead, rent control will do the opposite. It will discourage new construction, reduce the incentive to improve existing properties, and ultimately tighten the housing supply. And when supply tightens, prices rise — the exact opposite of what policymakers intend.

The unintended consequences will be real. Renters will face fewer options. Property owners will be less inclined to reinvest in their buildings. The city will see slower growth in its tax base, putting more pressure on existing taxpayers. And over time, Providence risks falling behind competing cities that are more open to growth.

I have been fortunate in my life to serve this city as both a councilman and mayor. I have also invested here because I believe in Providence. I love this city, and I have tried to demonstrate that commitment through both public service and private investment.

But policies matter.

When decisions like rent control become part of city policy, it forces people — including those who have invested here — to rethink future commitments. Why invest in a city that signals uncertainty and discourages growth?

This is a broader issue for Rhode Island. Too often, we adopt policies that make us less competitive than other states. We then wonder why people, investment, and philanthropy choose to go elsewhere. It is not because they do not care about our communities — it is because the environment we create makes it harder to succeed here.

This is not complicated. It is common sense.

Most responsible landlords do not raise rents arbitrarily. They respond to real cost increases: property taxes, insurance, maintenance, and financing. In many cases, rents are adjusted only when units turn over. If we want to ease pressure on renters, then we should also be looking at the cost drivers the city can influence — including taxes and regulatory burdens.

I urge the Providence City Council to rethink this misguided approach. If we truly want more affordable housing, stronger neighborhoods, and a healthier city budget, the answer is not rent control.

The answer is more housing, more investment, and policies that encourage growth — not policies that push it away.

You don’t make a city more affordable by making it harder to build.