| Tenant advocates are pressing Kamala Harris’ campaign to include rent caps in her platform as she prepares to deliver her first economic policy speech as the presumptive Democratic nominee on Friday. Voters would be thrilled. Economists, not so much. Harris pledged to “take on corporate landlords and cap unfair rent increases” during a campaign stop last month. Her campaign did not respond to a request for comment on whether she would offer a new plan or stand by the one President Joe Biden unveiled last month. Biden’s plan would eliminate a depreciation tax credit for two years for any landlord with more than 50 units who increases rent by more than 5 percent in a year — capping rent on roughly 20 million units around the country. The White House has also proposed a slate of initiatives to boost housing supply – which should be a key component of any plan to temporarily cap rents, according to Jim Parrott, nonresident fellow at the Urban Institute and a former senior White House economic adviser in the Obama administration. But new units would take years to come online. “So what do we do about renters that are under stress for the next two to three years? Do we just tell them, ‘Sorry we don’t have anything for you, good luck’?” Parrott said. But it doesn’t make sense to “build a bridge to an island if you’re not going to build the island,” he said. “The question is, does [Harris] feel like housing is important enough to address politically that she needs to come out with something more granular.” Voters are supportive: Seventy-three percent of battleground state voters say “protecting tenants against price gouging in rental housing” should be a priority for the next president, according to a recent Lake Research Partners survey of 1,000 registered voters in seven swing states. Three in four favor passing “rules that annual rent increases cannot be higher than increases in the cost of living,” according to the poll results, which were shared exclusively with MM. “This stuff is polling really well; otherwise we would not be seeing presidential ads with the word ‘rent’ in all caps — that’s a really notable change,” said Tara Raghuveer, director of the Tenant Union Federation. “We have our polling, and [the Harris campaign’s] messaging indicates to me that they have polling that may be even more dramatic.” Voter enthusiasm for rent restrictions makes some sense: Rents have risen more than 30 percent since the pandemic started in March 2020, according to Zillow. But critics, including many economists, say rent control actually impedes the development of affordable housing and even leads to the loss of existing affordable rental stock by inducing landlords to sell to owner-occupants in order to earn the market price for their property. Existing rental stock that isn’t sold off can also fall into disrepair since there’s little incentive to put money into improvements and upkeep. Just 2 percent of economists agreed with the idea that Biden’s rent cap proposal “would make middle-income Americans substantially better off over the next ten years,” in a survey last month by the University of Chicago Booth School of Business, compared with 74 percent who disagreed. Sixty-two percent agreed that the proposal “would substantially reduce the amount of available apartments” over the next decade. The plan amounts to a cheap ploy to get elected, according to Jim Lapides of the National Multifamily Housing Council, which represents large landlords. “The Biden administration, and now [potentially] Harris, is proposing a policy that would hurt the very people they purport to help, purely for political gains — nothing else,” Lapides said. “If this is about solving the housing crisis, you know, this is the absolute worst thing you could possibly do.” Rent-cap advocates dismiss many of those critiques as fearmongering by industry lobbyists and argue that current housing policy has failed tenants: “We can’t let profiteers and industry sycophants continue leading housing policy,” Raghuveer said. “Rent caps are not only politically popular but also sound economic policy.” IT’S THURSDAY — Have thoughts on rent control? You can reach me at kodonell@politico.com. And, as always, send tips to Sam at ssutton@politico.com.
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