Florida Toys With Housing Suicide

Florida has grown like nuts because it stays out of people's lives. They don't overregulate business, have right-to-work legislation, and low taxes.

Rent control is exactly the opposite of all that good stuff. Shortage of rental units in Orlando driving rents up? Developers will respond and build more housing driving rents back down. Why? Because it's profitable. Orlando should cooperate and encourage development.

If they institute rent control nobody will build anything new and the problem will get worse and the shortage becomes more acute.

Florida Toys With Housing Suicide

Orlando may resort to rent control, which is deadly for the supply and upkeep of rental properties.

By The Editorial Board, WSJ

Aug. 19, 2022 6:40 pm ET

One consequence of inflation is the bad policy temptations that come with it. Lawmakers in urban hot spots are flirting with rent control again, and a coming vote in Orlando, Fla., will give residents a chance to show they’ve learned more about economics than have local leaders.

Commissioners in Florida’s Orange County voted last week to put a rent-control measure on the ballot in November. The ordinance would block landlords from raising rents above the inflation rate, as gauged by the consumer-price index for southeastern states. The measure would expire after 2023, but once in place these policies tend to stay forever. See New York City.

Fast-rising rents have made price controls look like an appealing quick fix. Backers of the ballot measure point to the 35% spike in Orlando rents since 2020 as a sign that affordability has become an emergency. “I don’t want to regulate rent. I don’t want to control landlords,” Commissioner Mayra Uribe told the press last week. “I’m actually trying to find a solution for our housing problem.”

City councilors in Tampa and St. Petersburg also debated rent control this month before voting it down, and Miami-Dade leaders proposed a study meant to provide the basis for capping rent increases. More could be on the way. As reported by a Florida Atlantic University study, the Sunshine State in 2021 had eight of the 10 U.S. rental markets where prices rose most sharply.

The problem is that restricting prices would distort rental markets without providing much relief. Price controls on rent discourage builders from adding supply and deprive landlords of any benefit from refurbishing their properties. Existing tenants often see their neighborhoods deteriorate.

None of this should be news to Orange County leaders, who got a lesson in rent dynamics from their own adviser. GAI Consultants, who the commissioners hired to assess the policy, reported that the causes of rising rents are “likely beyond the control of local regulation.” Capping rent hikes would lead to “unintended consequences,” the consultants said, in the understatement of the year.

The report also identified the real solution for a price surge: adding more supply. There’s evidence in the home-buying market that builders are already seizing that opportunity. A record 1,200 new homes came up for sale in the Orlando metropolitan area in May, according to local realtors. Existing-home sales in the region have also dropped by a third since last year as buyers balk at list prices. Price rises have slowed without government intervention.

Orlando’s rent-control threat could be averted if local real-estate advocates can persuade a state court. Two industry associations have sued to kill the ballot measure, saying it violates a 1977 state ban on rent control. Common sense supports the plaintiffs, though the county commissioners may argue that today’s prices qualify as a “housing emergency” that would allow the measure.

That means voters would have to save the day. Florida has become a mecca for refugees from other states in large part because of sensible economic policies. Nothing would do more to ruin that friendly economic climate than the insanity of rent control.