In Defense of Rent Control and Rent Caps (Part II of II)


Via Boston Globe

Yesterday, we posted the beginning of Duncan Kennedy’s testimony before the Massachusetts State Legislature’s Joint Committee on Housing. Below is the second half of the testimony.

Duncan Kennedy –

Claim 3: State provision of more section 8 certificates and subsidized affordable projects can resolve the housing crisis.

More section 8s and more rent-restricted affordable subsidized units could in theory have a major impact on the housing crisis. But there is no conceivable way that can happen in practice. Growing income inequality means upper income demand for housing grows much more quickly than lower income. Upper income buyers bid up prices in order to expand their share of the available stock. Exclusionary zoning closes both upper income and affordable units out of the suburbs (in spite of our ineffectual inclusionary regime). At the same time, it shifts upper income demand back toward the older inner ring city neighborhoods.

The crisis generates displacement and shelter impoverishment (skyrocketing rent/income ratios) through a downward squeeze. The rich expand their neighborhoods to adjacent less wealthy areas pushing residents into the next area down the chain. Or they jump into well located lower income inner city areas forcing residents to crowd into adjacent low rent areas. The crisis now affects the whole lower half of the income distribution.

To reverse the crisis, even just to stabilize the current disastrous situation, would require subsidies, section 8s and affordable construction, to the tune of hundreds of millions or even billions of tax-payer dollars directed at the middle and no longer just the lower end of the chain. Rent control, either caps or a full regulatory program, allows localities to defend themselves against these market forces. They can tailor their response to their local market conditions and in many situations turn them to their advantage. No new taxes required. The innovative legislation being considered in Massachusetts permits them to increase the supply of affordable housing targeted to their local conditions without calling for massive new subsidies from the state.

Claim 4: Income eligibility tests for rent controlled and capped units are a good idea.

Requiring proof of low income status for eligibility to have rent capped would be counterproductive because it would cause landlord discrimination against the very people the bills area trying to help. It is already documented that a large percentage of section 8 certificate holders, and disproportionally African Americans, experience discrimination from landlords who don’t want to rent to them at uncapped fair market value rents. In the midst of a crisis of escalating rents, a tenant who qualifies for the cap is obviously not as good a bet for the landlord as a tenant who does not.

In building-based rent control, an income eligibility requirement would mean more units available for income qualified applicants but it would also risk stigmatizing residents and whole buildings. The better response of H3924 is to authorize anti-displacement zoning so that localities can exclude upper income neighborhoods. The remaining reduction in units going to low income tenants serves the by the now universally recognized policy goal of mixing income groups rather than concentrating poverty.

Continue reading

In Defense of Rent Control and Rent Caps (Part I of II)

Duncan Kennedy –

Via Boston Globe

The Massachusetts State Legislature’s Joint Committee on Housing is currently considering two bills that would revive rent control in the state. The first bill caps rent increases for not-owner-occupied residential housing at the CPI not to exceed 5%, with an income eligibility proviso. The second much more ambitious bill authorizes localities to choose among a menu of options to create their own version of full rent control. The options included fixing rents subject to increases for capital improvements, controlling condo conversion, good faith eviction requirement and zoning to deal with market variation within the locality.

On January 14, 2020, I offered testimony in support of the bills. Rent control has already been revived in Oregon, California and New York and in Massachusetts it is the focus of intense grass roots neighborhood activism particularly among the low income East Asian and Latina/o communities. At the hearing, they showed up in mass and testified in moving detail to the devastating effects of the crisis on individuals and neighborhoods.

What was absent, and the gap I tried with a fellow academic to fill, was a head-on attack on the industry arguments against the bills. Their arguments are of course rationalizations of their economic interest. But they make serious claims about consequences for the public interest and for supposed beneficiaries as well. Elected legislators, alas, are responsive both to the massive money spent lobbying against rent control and to some extent in good faith to the industry arguments. My goal, as laid out in the edited testimony we’re publishing today and tomorrow was to supplement not to displace the narration of blatant injustice and the invocation of a human right to decent housing with arguments in the policy language of the policy makers.

I wanted to post my testimony here because I think of it as law and political economy, in the particular tradition I work in, which might be called post-Marxist critical legal studies. It starts with groups led by elites, with strategies based on shared material and ideological, or “ideal” interests. They co-operate in social production and reproduction and compete over the distribution of stakes that are both material and “ideal.” Relations of domination and subordination are pervasive. The stakes of the game include the rules of the game, including prominently law. In this tradition the goal is not just to grasp the way law functions in struggles but also to push (humbly, uncertainly) on the side of emancipation or liberation or social justice.

Continue reading