In a conversation with GlobeSt, NAA’s Bob Pinnegar highlights the dangers of rent control and outlines possible affordability solutions.
In the battle to keep apartment rents affordable, rent control is not a good option Robert Pinnegar, president and CEO of the National Apartment Association (NAA) tells GlobeSt’s Brian Lee.
“In a rent control environment, you have limited returns, disincentive to invest and reinvest in product, a decline in the overall housing stock, discouragement of new construction and really, over the long term, it diminishes the value of the property and ultimately the local jurisdiction loses in property taxes,” Pinnegar told Lee. “As time moves on and the economy continues to grow, you really are limiting the options of the local municipality.”
Instead of pushing the rent control button, Pinnegar suggests that localities look to Denver, which has created a version of the Section 8 housing program that engages the private sector, and Connecticut, which offers tax abatement for the development of new rental housing and the rehabilitation of existing housing that is occupied by low- and moderate-income individuals.
Fixing the zoning and entitlement process could also go a long way to stimulate the development of affordable housing.
“In some areas, the entitlement process can take two to three years, so it’s a gamble that you’ll actually hit the market at a point when there’s demand to support that new product coming to market,” Pinnegar told Lee.