“Lift the Ban” Fails to Advance out of the Illinois Assembly
- Details
- Category: Latest News
They’re getting closer. And they remain determined. But, despite their best efforts, they have yet to accomplish their goal of lifting the statewide ban on rent control.
Housing providers had reason to be concerned when Representative Will Guzzardi, (D-Chicago, 39th District), succeeded in getting his “lift the ban” measure out of Housing Committee and onto the floor of the Assembly. But, despite his best efforts, he was not able to get the bill adopted by a majority of his colleagues before the spring legislative session closed.
For those of you who are not familiar with Will Guzzardi, he is a leading voice within the Democratic Socialist and Progressive caucuses. For a number of years, Representative Guzzardi has been leading the charge to get rid of the statewide ban on the enactment of rent control measures by local governments.
Despite his best efforts, he was not able to get the bill adopted by a majority of his colleagues before the spring legislative session closed.
Accomplishing this goal is a necessary first step in the broader objective to bring rent control to Chicago and other municipal or county governments across the state. In the view of the Democratic Socialists and many (although not all) Progressives, rent control is a necessary tool to limit rising rental costs. These legislators believe low and moderate-income households need protection from market forces which have pushed housing costs to unaffordable levels in some parts of Chicago and neighboring communities where strong demand and limited supply have driven up rents faster than incomes.
Of course, the belief that rent control can rein in market forces is, charitably, an unproven theory. Any scholarly review of rent control measures makes it clear that, far from keeping rents low, rent control actually pushes rents higher on an aggregate basis. As other cities with rent control demonstrate (think New York, San Francisco or Los Angeles), rent control benefits a few at the expense of many.
In the view of the Democratic Socialists and many (although not all) Progressives, rent control is a necessary tool to limit rising rental costs.
Once rent control is implemented, it provides an immediate disincentive to owners and developers of multifamily properties to maintain existing units or build new ones. By limiting the amount of rent an owner or developer can charge, it both reduces the ability of existing property owners to pay for necessary property maintenance, and limits the incentive of developers to build new housing since rents (and profits) on these developments are capped by governmentally mandated rent restrictions.
Invariably, these laws lead to a reduction in the production of new units, and an increase in the cost of existing units as supply falls. For the lucky few who are able to get rent controlled units, it’s a great thing (at least until your housing provider can no longer afford routine building maintenance). But for everyone else, the cost of non-controlled units just keeps rising as fewer and fewer new units are produced and more people compete for an increasingly limited supply.
Of course, the pro-rent control forces can try to get “universal rent control” where all rental units are controlled for all time, regardless of a tenant’s income or the occupancy status of the unit. In fact, legislation proposing just this has already been floated in the Illinois legislature (see related article from the Winter 2019 Newsletter).
The bottom line is, the threat of rent control is going to hang over our heads like the sword of Damocles for as long as the affordable housing crisis persists.
Universal rent control has never been attempted in the United States. If adopted, it would essentially nationalize housing, similar to what we find in present-day Cuba or the former Soviet Union. While this would be unprecedented in this country and would wreak far more damage on the housing industry than New York or San Francisco-style rent control, it appears to be the real objective of the rent control true-believers.
The point is, the “lift the ban” forces have grand plans for Chicago and Illinois. These plans, if ever allowed to be implemented, would be radical departures from the capitalistic, market-driven system we have in place today.
But before any of this can happen, Guzzardi and his allies need to get the state to agree to lift the ban on rent control so that local jurisdictions have the authority to implement rent control measures. And, so far, they have failed in this effort. Guzzardi even went so far as to propose allowing sub-jurisdictions as small as Precincts to adopt their own rent control rules to get more legislators to vote for his bill. This would have allowed Guzzardi to implement rent control in parts of Logan Square, while two blocks away in, say, Hermosa or Avondale, market forces would still set price.
Many observers viewed this legislative tweak to garner support as an act of desperation. Indeed, it was clear Guzzardi’s bill was in trouble when he was unable to convince 60 of his colleagues to vote for it by Friday, April 23. But the only deadline that really mattered was the end of the spring legislative session. We can all breathe a sigh of relief that the legislative session ended without passage of the “lift the ban” bill.
But don’t think this fight is over. There is nothing to stop Guzzardi from trying again. Let’s be clear – those of us advocating for pro-market solutions to the affordable housing problem have only won a reprieve, not the battle or the war.
Guzzardi’s forces are well organized and relentless. They are true believers that rent control is the only thing that can save low and moderate-income renters from a system that is not working for them. And while their solution is doomed to fail, the problem is real and the need for rent relief is growing.
If there is one thing we can be sure of, it is that Will Guzzardi’s “lift the ban” measure will be back – maybe next fall, maybe next year, and very likely repeatedly for years to come. We have learned that Guzzardi and his allies are not going to give up. They are nothing if not persistent.
Part of our job as housing providers is to recognize that there is an affordability problem, and propose alternative solutions that will actually help alleviate it. At RPBG, we have consistently argued that the only viable solution to the housing affordability problem is more housing. The best thing the government can do, whether local, state or federal, is to encourage the construction of more housing – not make it harder to build, as rent control will surely do.
So let’s get behind proposals that can work, and that rely on market-based incentives. There are several programs that have been tried in the past and that could be part of a broader affordability solution today. These include an expansion of low income housing tax credits (LIHTC), or a new round of federally funded project-based Section 8 buildings, or even a carefully designed relaunch of public housing.
This last suggestion may raise eyebrows here in Chicago where public housing immediately conjures up images of Cabrini Green-style high-rises. But public housing does not have to look like Cabrini Green. Look no further than the public-private renovation of Lathrop Homes happening right now on Chicago’s North Side to see what public housing can be when done right.
The bottom line is, the threat of rent control is going to hang over our heads like the sword of Damocles for as long as the affordable housing crisis persists. And the only way to solve this crisis is to find a way to build more housing that low and moderate-income households can afford. We all know rent control is NOT the answer. But we are fooling ourselves if we pretend there is no problem that needs to be addressed.
So, while we celebrate the most recent defeat of the “lift the ban” effort, let’s remember that the threat of rent control is not going away. More importantly, this is only a threat because the problem is real and crying out for a solution. As long as the affordable housing problem persists, activists will stay active and rent control will continue to be touted as the great panacea. If we don’t like what our opponents are proposing, we need to first acknowledge that something is wrong that needs to be fixed, and then come up with proposals of our own that offer truly viable solutions.
