Opinion: Proposed federal rent control would make San Diego’s housing crisis worse
New research shows that nearly four in ten San Diegans live in households that spend more than 30% of their income on housing. That’s more than 1.2 million people. Nearly two in ten people spent 50% of their income on housing, or more than 550,000 people. This is unsustainable – especially at a time when seemingly everything else is more expensive than it used to be.
This new study from the San Diego Foundation adds urgency to a problem of housing affordability that many of us have seen firsthand. San Diego is not alone, of course, as millions of Americans struggle to find affordable homes.
Housing affordability here and across the country has reached a crisis point and policymakers are looking for ways to make things right. Here in San Diego, those of us who are involved in the community are seeing policymakers roll up their sleeves and come up with local solutions. This is what we need.
But what is worrying is that a new federal policy proposal could actually worsen the crisis. The Federal Housing Finance Agency oversees loan backing entities that currently support more than four million apartments nationwide. The Federal Housing Administration is considering imposing government price controls on all apartments supported by these loans. This is a form of nationwide rent control — a policy that sounds like it might keep out-of-control housing costs in check, but actually serves too few people while discouraging new housing development.
Federal rent controls will have a destabilizing effect on the US housing market and capital markets more broadly. You don’t need to be a housing policy expert to realize that we actually need to increase the supply of housing in order to help those who need affordable places to live.
On the surface, rent control seems like a straightforward way to keep housing costs under control. FHA leaders hope that by simply capping rent increases, they can keep housing costs under control for America’s working-class families. However, the reality is much more complex than that.
This is because most studies show that rent control discourages new housing construction and hinders the ability of housing providers to invest in maintaining and improving their existing properties. Reducing the quantity and quality of rental housing available is not a productive path toward relieving the burden on the 1 million San Diegans who spend a third of their income on housing.
Rent control provides stability for some while keeping housing out of reach for those who need it most. This is unfair, and as is often the case, the benefits of this inequality trickle down to white Americans. We see this in San Diego, where the San Diego Foundation also found that the burden of high-cost housing is not equal across the city. Black and Latino San Diegans are more likely than whites to spend more than 30% — or even 50% — of their income on housing.
California has voted to reject rent control several times by wide majorities. In 2018 and again in 2020, ballot measures aimed at statewide rent control failed by 20%. Proponents want to try again in 2024. So why should we support this from the federal government? California Senator Alex Padilla should know this, yet he encouraged the FHFA to move forward.
Rent control exacerbates the root cause of housing affordability – lack of supply. San Diego needs to build more than 2,000 apartments a year to keep up with demand. We need policymakers to make it easier to meet the needs of our community. We can end the supply gap and provide more affordable housing, but broad government controls and one-size-fits-all won’t do it. I know this because my company builds residential homes from Temecula to El Cajon and from San Diego to Chula Vista.
Reforms like zoning reform and investing in affordable housing for those who need it would help. As is removing barriers for builders to finance the construction of new homes and apartments, which is the actual well-intentioned goal of FHA policy.
Padilla’s goals and those of FHFA are crystal clear: end the housing affordability crisis. But we need successful solutions. Our neighbors depend on us.
Rick Snyder is president of RA Snyder Properties, a housing development and property management company headquartered in San Diego. He is a past president of the California Association of Realtors and 2024 president of the National Apartment Association.