In Virginia, some legislators want to give local governments the ability to impose cumbersome rent controls on housing. That’s a mistake. Rent control killed multifamily housing construction in Maryland’s most populous county. Getting rid of rent control greatly expanded the amount of rental housing in Argentina, without raising rents (one of the many reasons that occurred is that people were more willing to rent out rooms if they didn’t have to worry about being prevented by rent control from raising rents in the future to cover rising costs, such as the need to renovate or pay rising utility or mortgage bills). Indeed, average rents actually fell in inflation-adjusted terms in Argentina after the end of rent control. Around 93% of economists say rent control is bad, because it reduces the quantity and quality of housing.
Legislators have introduced two bills targeting so-called “rent gouging”, defining rent increases of over 3% as rent gouging. That’s a weird, unreasonable definition of rent gouging, because even pro-tenant rent-control boards sometimes allow rent increases bigger than 3%, and expenses often rise faster than 3%. Inflation was about 7% in 2021 and 2022, far above 3%. But HB278 and SB355 would authorize local “rent-gouging” ordinances, under which a landlord “cannot increase the rent by more than the locality’s calculated allowance, not to exceed three percent.” Rent levels could be restricted even further under such an ordinance, because the permitted increase must be “no more than three percent,” but could be restricted to less than three percent (such as one percent). 28 members of the House of Delegates are sponsors of HB278, all of them progressive Democrats.
3% is an unreasonably low cap on rent increases — even Washington, DC’s progressive, pro-tenant rent control board allowed most landlords to raise rents at annual rates such as 8.9% and 6.2% in the recent past, because landlords’ costs often rise by much more than 3%.
Another bill, HB1178, would authorize a different rent-control cap on rent. It “provides that any locality may by ordinance adopt rent stabilization provisions…all landlords who are under rent stabilization…cannot increase the rent by more than” the inflation rate, that is, “the annual increase in the Consumer Price Index for the region in which the locality sits.” Limiting rent increases to the general inflation rate is unwise, since landlords’ costs have recently risen faster than inflation in much of Virginia. Those costs include rising property taxes, rising electricity costs over the last year, and rising mortgage interest rates over the last several years. Electricity bills rose 13% from August 2024 to August 2025, far more than the general inflation rate over that period, and landlords need to pay electric bills to keep the lights on and heat pumps working in common areas. Mortgage interest rates have risen significantly over the last five years, increasing the cost of landlords with new or adjustable rate mortgages. The real estate tax rate has risen in my county since 2023, and commercial landlords usually pay a higher tax rate than homeowners do. Once upon a time, commercial property owners and homeowners paid the same tax rate, but then my county, Arlington County, imposed a big additional tax on commercial property owners, of 12.5 cents per $100 of assessed value. Commercial landlords’ costs went up faster than inflation as a result.
Even left-leaning economists mostly think rent control is stupid: The Swedish economics professor Assar Lindbeck, a Social Democrat, said, “rent control appears to be the most efficient technique presently known to destroy a city—except for bombing.”
Even back when it was more Democratic-leaning than it is today, the Washington Post opposed rent control, explaining, “Rent-control laws can be good for some privileged beneficiaries, who are often not the people who really need help. But they are bad for many others.” For example, after San Francisco imposed rent control, “landlords responded by converting their buildings into condos they could sell or business properties they could lease without rent-control restrictions — or by demolishing their old buildings and replacing them with new ones” not subject to rent control. Moreover, “landlords have less incentive to maintain their properties in a rent-controlled environment,” reducing housing quality. “And since rent-stabilization policies often tend to discourage people from moving, they harm worker mobility and the economic dynamism associated with it.” These observations were made by the editorial board of the Washington Post, which had not endorsed a Republican for president since 1952.
Rent control reduces the value of housing stock, shrinking the property tax revenue that funds schools and local governments. “Researchers at the University of Southern California said rent control hurt property values in St. Paul, Minn. by $1.6 billion,” reported Market Watch.
As the Nobel Prize-winning economist Paul Krugman — a Democrat — noted in the New York Times, economists overwhelmingly oppose rent control: “In 1992 a poll of the American Economic Association found 93 percent of its members agreeing that ‘a ceiling on rents reduces the quality and quantity of housing.’ Almost every freshman-level textbook contains a case study on rent control, using its known adverse side effects to illustrate the principles of supply and demand. Sky-high rents on uncontrolled apartments, because desperate renters have nowhere to go — and the absence of new apartment construction, despite those high rents, because landlords fear that controls will be extended.”
