Socialist Alternative: Why Rent Control? An Interview with Kshama Sawant

Kshama Sawant

From the Socialist Alternative website:

Rent Control, Rent Control! Make Our Cities Affordable!

As housing prices skyrocket nationally and internationally, the idea of rent control is again on the rise. In addition to becoming a central debate in Seattle elections this year, new rent control laws were recently passed in Richmond, California, and in Berlin, Germany.

In 2008, a statewide California proposition to ban rent control was decisively defeated, with over 61% in favor of keeping rent regulation. However, as the demand for rent control becomes louder, so does the real estate industry’s fear-mongering campaign. In order to dispel the myths peddled by developers and the corporate media, we interviewed Kshama Sawant, Socialist Alternative Seattle City Councilmember, who has made rent control a central demand of her reelection campaign.

Why rent control?

Kshama Sawant: Right now, landlords have the right to raise rents by however much they like: 50%, 100%, or even 200%. People can only take stagnating wages and skyrocketing rents for so long before they fight back. Without the resources and power to control housing supply, communities inevitably are forced to demand regulation over their rising housing costs. Rent control is merely a way of outlawing price gouging and preventing landlords from profiting off the increase in property values driven by real estate speculation and lack of supply. It’s essential to address the existing power imbalance in which landlords and developers have all the control, just as a minimum wage is essential to defend workers from corporate executives who prefer to keep wages low.

Aren’t rent increases a function of supply & demand? Don’t we just need to build more units?

KS: Developer lobbyists often argue that the price of housing is simply a function of supply and demand. Left to their own devices, though, developers generally maximize their profits by building luxury apartments and condos. And rather than lowering rents, such development, instead, tends to drive up prices in a given neighborhood, as existing affordable housing is torn down and replaced with high-end units. So, contrary to what the proponents of the free market will tell you, we will never build our way to lower rents through private development, no matter how many tax breaks and sweetheart deals are cooked up for profit-hungry developers.

San Francisco has a rent stabilization ordinance dating back to 1979 but also has an expensive housing rental market. Why didn’t its rent stabilization laws stop skyrocketing rents?

KS: Unfortunately, as in other cities, San Francisco’s rent regulations have been slowly repealed under repeated attacks from real estate interests. In 1995, California passed the Costa-Hawkins Act that prohibited the expansion of rent stabilization to newer units. This created an economic incentive to tear down existing rent-controlled housing, and now San Francisco’s rent-regulated housing stock shrinks every year from demolition as new unregulated units are built in their place. The legislation also deregulated rents after the tenant moved out, so a landlord can raise the rent as high as they want, even though the housing is “rent controlled.” This policy, called “vacancy decontrol,” not only undermines long-term affordability but also gives landlords incentives to evict.

Won’t it stop development?

KS: The enemies of rent control often argue that it prevents investment in residential construction, reducing new housing supply. The facts do not support this argument when looking at the actual history of rent regulation. In fact, the two largest building booms in New York City history occurred in periods of strict rent control, first in the 1920s and again from 1947-1965. Rent regulation in no way inhibits construction, which is, instead, controlled by macroeconomic factors such as the boom-and-bust cycles under capitalism.

How can we win rent control?

KS: The fight over rent control in Richmond, California – passing 9-2 on the city council only to see developers block its implementation – reveals this struggle for what it really is: a battle to control the housing supply, between the community that needs high-quality affordable housing and big developers who exploit this basic need for profit. While we fight to stop price gouging with rent control, we can also loosen the grip of the market on housing supply by investing in a public option: the construction of high-quality public housing paid for by taxing the big developers. Just as with the $15 minimum wage, winning rent control and affordable housing will require building our independent strength and a movement to demand real action.

14 thoughts on “Socialist Alternative: Why Rent Control? An Interview with Kshama Sawant

  1. NewFederalist

    Just double the minimum wage to $30/hour and there won’t be any need for rent control.

  2. Andy Craig

    But whatever you do, don’t ever believe that the solution to a shortage of housing involves building more houses to supply the demand. That’s tricksy free-market talk!

  3. Deran

    If you lived in Seattle you’d know building more rental housing is not doing a very good job os stabilizing or reducing rents.

    The problem is that rental housing is owned by hedge funds and then managed by companies owned by the same hedge funds. No longer are rental properties owned by individuals looking for a steady reliable income. Approaching ownership of rental property like bonds used to be, instead of viewing rental property as a speculative equity.

    Because of this change in ownership patterns of rental housing means renters need similar large scale protections, ie rent stabilization regulations.

    In WA State all forms of local rent regulation are outlawed. I would think this should be left up to localities.

    And if one were paying attention to the upcoming Seattle city council election you’d see that developers, hedge funds and speculators are setting up Super PACs to spend incredible amounts of money against any candidate who has exhibited any sympathy toward any for of rent regulation. And when I say incredible amounts of money. I mean in the past $100k was considered a lot of money for an incumbent to raise and spend. This year “independent expenditures” as they are called are running a couple hundred thousand doollars per race.

  4. paulie

    I saw rent control in action in NYC. It was one of the prime reasons for a lack of housing. Landlords could not make a profit, so they resorted to letting buildings decay, paying arsonists to burn them down for the insurance money, abandoning them, paying thugs to intimidate people to move out so they could gain control of 50% plus one of the units and get a vote to convert to condo to sell the apartments. I am talking mostly 6 story apartment buildings here. Many, many ended up abandoned. There were whole miles of abandoned buildings in some neighborhoods. A few lucky tenants hung on to way below market rate rent controlled units for decades, and some politically connected people got them as favors. Other families ended up illegally crowding multiple people into apartments, living in SROs (single room occupancy – bum hotels with the bathroom down the hall shared with other units and no kitchen), living in dangerous high rise housing projects, being homeless, or with long commutes because they had to move out of the city because there was simply no way to live there, or within the city because they had to move to far flung neighborhoods from where they worked. All while many, many thousands of units (millions?) stood abandoned all over the city.

    Of course, the empty buildings were focal points for every kind of crime, too. Crack was new on the scene and the mental hospitals were no longer forcing people to stay nearly as much as in the past, and turning people away for lack of beds even when they wanted to stay at times. Empty buildings were full of crackheads, junkies, crazy people, drug dealers, prostitution, rapes, murders, beatings, robberies, dirty needles, asbestos, lead, mold, rats, roaches, underage runaways and throwaways, child molesters, illegal guns, stolen property, animal abuse… pretty much anything you can think of and then some. This was as a result of rent control causing landlords to abandon all these perfectly good buildings.

  5. Andy Craig

    There is something wrong/funny, that the same people who will point to “98% of experts agree” when it comes to climatology, will then turn around and in the same breath advocate a policy which 90%-98% of economists agree doesn’t work and only has negative effects.

  6. ATBAFT

    “The problem is that rental housing is owned by hedge funds and then managed by companies owned by the same hedge funds. No longer are rental properties owned by individuals looking for a steady reliable income. Approaching ownership of rental property like bonds used to be, instead of viewing rental property as a speculative equity.”

    Deran reported the above conditions for Seattle. I ask, “Is there some law that prohibits rental properties being owned by individuals or socially-conscious groups of investors? If so, then
    you need to work on repealing these crony landlord laws. If not, then you need to ask yourself why it seems impossible to put together investor groups who would be happy to serve their fellow man and make what they consider a reasonable profit. Same thing for whining about there being no supermarkets in certain neighborhoods or inexpensive fast food alternatives.
    Be an entrepreneur with a conscience or figure out why the government stands in your way.

  7. Green_w_o_Adjectives

    “we can also loosen the grip of the market on housing supply by investing in a public option: the construction of high-quality public housing paid for by taxing the big developers”

    Better yet, take this tax on the big developers and invest in loans for housing co-operatives for working people.

    I have the same problems with rent control that I do with Fight for 15$. Rather than working towards transferring ownership (and authority) to workers, they hope to raise the condition of workers by putting a gun to the head of employers (owners).

    To be sure this kind of agitation has its uses in raising consciousness. It directs some attention to the justice norms underlying property ownership in society, as well as the relationship between ownership and government.

    Honestly the Seattle SA idea I like best is fighting for public broadband.

  8. Bondurant

    How many wealthy celebrities are living in rent controlled NYC apartments? To my knowledge Cyndi Lauper still lives in one.

  9. paulie

    I have the same problems with rent control that I do with Fight for 15$. Rather than working towards transferring ownership (and authority) to workers, they hope to raise the condition of workers by putting a gun to the head of employers (owners).

    Agreed!

    I ask, “Is there some law that prohibits rental properties being owned by individuals or socially-conscious groups of investors? If so, then
    you need to work on repealing these crony landlord laws. If not, then you need to ask yourself why it seems impossible to put together investor groups who would be happy to serve their fellow man and make what they consider a reasonable profit. Same thing for whining about there being no supermarkets in certain neighborhoods or inexpensive fast food alternatives.
    Be an entrepreneur with a conscience or figure out why the government stands in your way.

    Agreed!

    Sounds like two ways of saying the same thing to me.

  10. Mark Axinn

    Bondurant–Mia Farrow lived for decades on Central Park West (not the Dakota!) in a large rent-controlled apartment. Many celebs did and even more politically connected people did as well.

    Andy C–Great link on King Canute. I had heard of his theory that you cannot stop the inevitable just like one cannot stop the tides, then forgotten it until now. Thanks!

  11. Mark Axinn

    >Is she [Cyndi Lauper] still wealthy?

    NF–She just wants to have fun.

    ALERT: Paulie, this cries out for a video. 🙂

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