EDITORIAL: Rent-control backers embrace blissful ignorance

One would hope that those backing a new law would have some idea of its fiscal impact. That doesn’t appear to be the case with Culinary Union Local 226 and its rent control proposal.

On Wednesday, the North Las Vegas City Council considered a financial impact statement on the Neighborhood Stability Ordinance. That’s the Culinary’s rent-control scheme. It would limit annual rent increases in North Las Vegas to the rate of inflation or 5 percent, whichever is less. The Culinary said it has gathered enough signatures to put this measure on the November ballot.

Union officials claim this intervention is necessary because rents increased by 25 percent in 2021. Housing prices are certainly rising. Inflation-causing policies preferred by President Joe Biden and Democrats are hurting Americans, especially those with lower incomes.

But the effects of rent control would be far-reaching. It’s hardly a new idea. It’s been tried unsuccessfully for decades. Still, members of North Las Vegas staff did their best to estimate the fiscal impact of the proposal, citing an article from the liberal Brookings Institute. “One study concluded that rent controls lowered property values by an average of 1.8 percent per year,” the proposed fiscal impact statement says. “If we assume the same percentages in North Las Vegas, the result would be an average loss of property tax revenue to the city of $3.2 million per year.”

This didn’t sit well with the Culinary. It successfully asked the council to delay adopting any ballot statement that included such information. But what alternative did union officials propose? They didn’t offer one, instead asking for more time to work with city staff.

This is a shortsighted approach to policy making. Rent control has benefits for a specific subset of people — current renters. It also has a long string of negative downstream effects, including on future renters. Promoting an understanding of the benefits and costs of a proposal is common sense and helps ensure voters can make informed decisions. But the Culinary isn’t known for its concern about long-term consequences.

Experienced politicians, such as Gov. Steve Sisolak and Rep. Steven Horsford, should know better. Yet both support the move. “We need to have everything on the table when it comes to addressing the greed of corporate landlords,” Gov. Sisolak said. One suspects Gov. Sisolak does know better. If he really thought rent control worked, he’d call a special session to enact it. Or he would have demanded it during a previous regular session. He didn’t.

Whatever political benefits this effort provides Gov. Sisolak won’t reduce the destructive impacts of this policy. Those who want to reduce housing costs should demand governments enact policies that encourage the development of more housing. Rent control does the opposite.