Sen. Annette Cleveland (D-Vancouver) released this statement today detailing her concerns with SB 5961, legislation that would impose rent control in Washington state:

“People are angry and scared, and I don’t blame them. What could be more threatening than the potential inability to provide a stable, safe home for those you love? I get it. Oh boy, do I get it. I’ve lived it.

“I’ve also been party to enough passionate conversations with constituents and stakeholders by now that I don’t think any of us has much of a chance of changing anyone else’s mind on this issue, so I won’t try. What I will do, in an effort to offer insight into my recent legislative actions, is share a list of factors that led me to conclude I could not support SB 5961. Whether people agree or not, they’ll at least be able to weigh for themselves the information that shaped my rationale.

“My biggest problem with SB 5961 is in the core language of the bill: The bill caps rent increases at 15 percent annually. This is stated clearly and unequivocally and would not create a one-time increase; landlords would be able to increase rent by 15 percent year after year, well in excess of the typical economic growth of household salaries and means. The math is brutal. What renter could afford a 15 percent increase in rent with each new year?

“Many researchers have documented real-world problems caused by existing rent control programs.

“In a white paper on rent control in San Francisco in 2019, Stanford economists found that rent control ‘reduced the available rental housing by 15 percent and that the policy likely drove up citywide rents, damaging housing affordability for future renters.‘

“Meanwhile, an examination by the Urban Institute reports that ‘Black and Hispanic residents are underrepresented in rent-controlled units’ and that rent control’s benefits ‘are concentrated among wealthier, whiter households.’

“This conclusion is reinforced by numerous studies showing that ‘rent discounts are not progressively distributed’ once rent control is adopted and that ‘people with lower incomes do not get larger rent discounts. And many with high incomes get very sizable discounts.’

“ ‘While rent control appears to help current tenants in the short run,’ the Brookings Institute reports in a study of rent control in Cambridge, Mass., and San Francisco, ‘in the long run it decreases affordability, fuels gentrification, and creates negative spillovers on the surrounding neighborhood.’

“None of this surprises me. I vividly remember, as inflation rose in the 1970s, how the Nixon administration imposed price controls in an attempt to curb inflation and the hardships it brought to my parents’ household and to our neighbors throughout the Vancouver area. However well-intentioned, the policy was a dismal failure that set back our economy and inflicted lasting economic harm on everyone we knew.

“Across the river, Oregon and Portland have passed rent control programs that resulted in 14.6% rent increases in 2022. Doesn’t it make sense to watch and learn from what’s happening in Oregon and Portland so we can make sure a similar policy here at home does not trigger unintended consequences?

“Nationally, rent increases have averaged 3.18% since 2012, and the rate of price growth in rents nationally has slowed for the past 19 months consecutively. This indicates that our efforts to increase housing supply are beginning to work and suggests we should continue these efforts before adopting risky policies that might do more harm than good and could disrupt the positive path we are now on.

“Indeed, the more case studies I examined, the more reasons I found to be wary of rent control.

“In one alarming study, economists found that rent control ‘created a powerful incentive for landlords either to convert rental units into condominiums or to demolish old buildings and build new ones. Either course forced existing tenants — especially younger renters — to move. Landlords affected by the new 1995 policy tended to reduce rental-unit supply by 15 percent.’

“Even an observer who favors rent control acknowledges concerns that ‘rent control empowers one small group of people: the tenants who were living in buildings when the law was enacted. Arpit Gupta, a professor of finance and economics at New York University who said he is a ‘little skeptical of rent control,’ explains that these policies often act as “a one-time transfer of equity from landlords to current tenants.” That is, instead of helping make renting permanently affordable, rent control policies just transfer the benefit of housing scarcity from the landlord to the current tenant. … So while there is a clear benefit to existing renters … it’s important to look at what happens to rents and renters in aggregate.’

“Clearly, there is no shortage of research in this area. But for those who strongly favor rent control, will any of these factors change their minds? At this point, I doubt it; people are dug in. But I want to be open about why I am hesitant to support a policy with so many negative consequences. And difficult as it is – and, trust me, as someone whose family faced losing our home when I was a child, I’ve never forgotten the fear and despair that comes with that – I hope more people will seriously weigh the value of doing all we can to fully understand the ramifications of rent control to ensure we don’t inadvertently hurt the very people we want to help.

“Haste doesn’t merely make waste. It can inflict lasting hardship on families that need solutions to housing that don’t just sound good but provide housing that is affordable for more than one year.”