Banning rent control may increase the housing supply and make housing more affordable.
By: Elizabeth Miller
In 2023, Governor Ron DeSantis signed the Live Local Act into law, marking the largest affordable housing investment effort in Florida’s history. In addition to this significant investment, the Act made a crucial change to Florida’s local government housing policy by banning rent control.
The first rent control policies, enacted in the 1920s, took the form of price ceilings, which prohibited rent from exceeding a set price. Today, rent control policies more commonly set a cap on the rate at which rent can increase for specific properties within a city. These modern rent control laws are also called rent stabilization efforts, which distinguish them from the earlier, more restrictive approaches.
Florida’s major cities currently face a critical shortage of housing units, which is driving up housing costs across the state. For example, rent prices for one-bedroom units in Florida’s most populated metros increased by an average of 17.8% between 2023 and 2024.
Graph created by Elizabeth Miller. Data sourced from The U.S. Department of Housing and Urban Planning FY 2024 FMR Documentation System. FY 2024 Final Fair Market Rents Documentation System — Select Geography (huduser.gov).
Prior to the Live Local Act, rent control was only lawful to exist for one year to “eliminate an existing housing emergency which is so grave as to constitute a serious menace to the general public.” In 2022, Orange County voted to utilize this provision with a one-year cap of 9.8% on rent increases, but it was struck down by the Florida Supreme Court. Although renters, especially in Orange County, are worried about managing their monthly rent, keeping rent control may do more harm than good.
A major contributor to rising rent in Florida is an inadequate housing supply, which can be attributed to developers lacking the incentive to build and landlords prioritizing profit to stay competitive and maintain quality units. Although rent control aims to reduce the impact of rising rent, it attacks the problem from the wrong end and fails to address the underlying shortage in the housing market. Rent control discourages developers from building housing and incentivizes landlords to develop other fees or find ways to increase their profit since their earnings are limited. In other words, rent control reduces construction in a market that needs more housing supply.
Research suggests that rent control reduces rental supply and increases rent city-wide, inherently worsening affordability. For example, in 1994, San Francisco enacted rent control, and a Stanford study estimated that this resulted in a 6% reduction in rental supply and a 5.1% rent increase citywide. Rent control causes these supply imbalances because it only benefits the people in rent-controlled units. For instance, a study of New York’s rent control policies published in The Journal of Real Estate Finance and Economics found that rent control only helped tenants living in rent-controlled units. Residents without rent control experienced no benefit to the policy or stabilization of rental prices. If rent control reduces rental supply, lessens construction, and increases rent citywide, it’s an ineffective policy to solve a housing affordability crisis.
Instead of enacting rent control, Florida needs to increase the supply of housing by incentivizing developers to build affordable housing and enact deregulatory efforts that reduce the cost of construction. Luckily, the Live Local Act also funds many affordable housing programs to incentivize affordable housing development and slow rapid rent growth. The act also preempts local regulations that restrict supply by allowing affordable housing development on industrial land. Although renters are worried that the ban will raise their rent even more, a stabilization of rent prices overall is more likely as the affordable housing supply increases.
Edited by Sarina Francis and Katherine Kelsey
Elizabeth is a research intern on the housing affordability team for the DMC and has worked on a variety of projects on housing choice vouchers and impact fees. She is a senior studying Public Policy and Political Science and hopes to work at a think tank after graduation.
