Landlord opposition to rent control and the politics of class monopoly rent

Introduction

Housing costs have risen to unprecedented levels across the United States (US) and beyond in recent years. Non-coincidentally, rates of houselessness have escalated to crisis levels in many US cities over the same period (Colburn and Aldern, 2022). In response, tenant rights activists and some legislators are advocating for the resuscitation of various forms of rent control, with recent rent control legislation passed statewide in Oregon in 2019 and California in 2020. This push to enact rent control has, predictably, been met with substantial opposition by landlord associations, which is mobilized by a variety of long-standing arguments rooted in neo-classical economic principles (i.e. simplistic supply/demand logic) that have routinely been propagated by mainstream economists (see Krugman, 2000) in numerous essays and editorials (e.g. Lawler, 2020; Perrie and Block, 2018; Reeves, 2020; Rosen, 2018; see Slater, 2021). These arguments continue to perform the political work (under the banner of science) that provides elected officials with the justification needed for opposing tenant rights legislation (e.g. rent control) on behalf of real estate interests. As Slater (2021: 703) notes, “many of these economists are very well known and very well-read public intellectuals. When they condemn rent control, their audiences listen to them and believe them.”

This primarily political and ideological attack against rent control has proven to be successful, as many of the “second generation rent control” measures that were enacted in the US in the early 1970s have been methodically eroded since the onset of neoliberal hegemony in the 1980s. We refer to this attack as ideological because, despite it coming from both liberal and conservative economists, these arguments have a questionable grounding in empirical reality (Appelbaum et al., 1991; Gilderbloom and Appelbaum, 1992; Slater, 2021).

Slater (2021: 704) identifies three core tenets, or “myths,” that comprise this opposition to rent control: that it “threaten[s] the quality, supply, and efficiency of a housing sector anywhere any time.” Slater (2021) thoroughly deconstructs these myths in a devastating fashion. This intervention extends the critique of the second myth, which Slater (2021: 704) recognizes as perhaps the “most dominant one of all.” More specifically, this myth holds that if rent control legislation is enacted, “there would be no incentive for anyone to become a landlord, existing landlords would withdraw their properties from the market, and developers would not build any new rental housing” (Slater, 2021: 705; for historic examples, see Hackner and Nyberg, 2000; Heffley, 1998; Glaeser, 2002; McFarlane, 2003). This, consequently, as we are told, renders rent control counter-productive in that it can only worsen any housing crisis as rents increase due to landlords actively reducing supply. We emphasize the end of this sentence because, as Harvey (1974) recognizes, the portion of rent attributable to landowners collaboratively (wittingly or not) manipulating supply/demand conditions to ensure acceptable profit margins can be termed class monopoly rent (CMR), a concept that, ironically, mainstream economists have historically either ignored, disavowed, or downplayed in the housing sector (Evans, 1991).

But does this happen? Do landlords react to rent control in ways that reduce housing supply and increase rents? There is no systematic empirical evidence that supports this argument, as we review below. As such, it does not appear that landlords respond at least in widespread ways that yield this result to significant degrees (Conley, 2018; Gross, 2020; Rajasekaran et al., 2019; Slater, 2021). As we also review below, the legitimacy of CMR as an economic concept is, and has historically been, contested. But the question of its legitimacy is less important for this intervention than the reality that landlords act as a collective voice through landlord associations to (unwittingly) imply that CMR is legitimate, and that pursuing it is what they will undeniably do if rent control is enacted. We argue that this effectively constitutes the discursive, though implicit, enactment of class monopoly power as a political strategy to lobby against tenant rights proponents. In this context, we argue that landlords effectively engage in what we identify as a “politics of class monopoly rent” which functions as a discursive and politically expedient weapon against tenant rights activists and low-income renters otherwise held captive in unaffordable housing markets.

In what follows, we first review the relevant scholarship on the sociology of housing markets to dissect the argument that rent control leads to reduced rental housing units (and, consequently, rising rents). We then review the relevant scholarship in Marxian rent theory to illuminate the unabashed enactment of class monopoly power as a persistent discursive tactic within the broader class-based politics around tenant rights legislation in the US. The following section draws on recent examples of this politics advanced in the context of Oregon's statewide rent control legislation. In the process, we bring scholarship on the sociology of housing markets into closer dialogue with Marxian rent theory to chart new conceptual terrain for conceptualizing the pursuit of CMR as a political strategy and demonstrate just how insidious this politics plays within the dynamics of capitalist housing markets. We conclude by discussing the implications our analysis poses for tenant rights activists and pro-tenant legislators who must invariably counter this political strategy in the process of mobilizing rent control legislation.

The sociology of housing markets

Landlord opposition to rent control has long been criticized among scholars engaged in the sociology of housing markets (McCabe and Rosen, 2023), with some of the most compelling entries coming from the work of John Gilderbloom and Richard Appelbaum in the 1980s and 1990s (Appelbaum and Gilderbloom, 1990; Appelbaum et al., 1991; Gilderbloom, 1981, 1989; Gilderbloom and Appelbaum, 1987, 1992; Gilderbloom and Lin, 2007; Gilderbloom and Markham, 1996). This scholarship counters the predominately unsubstantiated claims made by mainstream economists through empirical studies looking into these effects in the context of real-world examples (Gilderbloom and Lin, 2007: 2). The results have been mixed, and when it comes to whether rent control induces a reduction in supply and a corresponding increase in rents, the results reveal something different from the blanket affirmative assumptions routinely proffered by economists and followers (see Conley, 2018).

First, it is important to distinguish between the first- and second-generation of rent control legislation in the US, with the first coming after World War I and the second generation coming in the 1970s. As Slater (2021) points out, the attack on rent control by economists is primarily based on the first generation of rent control measures. Second-generation rent control has been less aggressive, seeking to strike a balance between tenants and landlords without reducing the quantity or quality of housing supply (Gilderbloom and Lin, 2007). New production is often exempt, and rent increases are allowed up to a certain point to ensure landlords can still realize a “fair” rate of return. Yet, the onslaught against rent control by economists continues to treat second-generation rent control measures as identical to first-generation measures, something that nobody is advocating for today. A good example of this comes from Perrie and Block's (2018: 50) polemical tirade:

Rent control was first put into place after World War I when many soldiers were returning from the front looking for housing … Putting a cap on rent was supposed to be a temporary fix until the market stabilized again, however, the law has become a permanent fixture in cities such as New York. When rent levels are set below where supply and demand intersect, it causes a shortage …

Here, much of the mainstream economic criticism is rendered moot insofar as contemporary rent control legislation seeks to mitigate these negative impacts (Rajasekaran et al., 2019). Even Glaeser (2002), among the most outspoken critics against rent control, did not find a clear-cut impact of rent control on new construction, forced to conclude that rent control impacts housing supply differently across urban contexts (also see Sturtevant, 2018).

The most frequently cited recent study indicating that rent control reduces supply comes in the case of San Francisco (Diamond et al., 2018, 2019). Diamond et al. (2019) reveal a decline in the rental housing supply for multifamily buildings which led to a 7% increase in city-wide rents from 1995 to 2012. Diamond et al. (2018) also revealed that rent-controlled units in San Francisco were 10% more likely to be converted to condominiums, although Diamond et al. (2019) show that this rental housing reduction was significantly more pronounced among corporate landlords. Asquith (2019a) adds that landlords of rent-controlled units in San Francisco exhibited an increased likelihood to evict their tenants to capitalize on demand shocks in the uncontrolled market, even at the cost of leaving them vacant to speculate, in-line with Evans’ (1999a, 1996b) observations. Of course, mainstream economists tend to conclude that, for these reasons, the only solution to this problem is the abolition of rent control. However, these reasons could just as easily lend support for coupling rent control with condominium conversion bans and the kind of eviction protection measures included in Oregon's recent statewide rent control legislation (Conley, 2018; Pastor et al., 2018).

Moreover, the case of San Francisco is far from evidence of a universal phenomenon, though it would indicate that landlords in San Francisco enjoyed a regulatory environment that enabled them to counter-act the objectives of rent control by reducing supply. In the case of New Jersey, the oppositional arguments from economists are unfounded (Gilderbloom and Markham, 1996; Gilderbloom and Lin, 2007; also see Appelbaum et al., 1991; Gilderbloom and Appelbaum, 1992). Gilderbloom and Lin (2007) found no difference in maintenance levels coupled with a lower number of rooms in rent-controlled units (rather than less units overall), indicating that landlords were increasingly subdividing their units, with no change in the level of rent. Likewise, Bonneval (2019) found no evidence that landlords and developers suffered from rent control during a 50-year period in Lyon, France.

Regardless of whether rent control leads to decreased supply and rising rents, one thing that is much clearer in the evidence is that the abolition of rent control almost always leads to higher rents and more expensive housing followed by evictions and displacement (Slater, 2021), rather than the predicted relief in affordability. When rent control ended in Massachusetts in 1995, both Sims (2007) and Autor et al. (2014) found little effect on the construction of new housing coupled with a major increase in rents, something Diamond et al. (2019) also note in the case of San Francisco. And while landlords in Cambridge, MA, were found to be incentivized to convert their units to condominiums (something that can be prevented with conversion bans), other studies have revealed that in tight markets rent control can actually increase supply (though not necessarily good quality supply) (Ambrosius et al., 2015; Gilderbloom and Lin, 2007).

Based on how housing markets actually operate, scholarship on the sociology of housing markets also reveals a tendency for property owners/producers to cooperate rather than compete (Gilderbloom and Appelbaum, 1987; Gilderbloom, 1989), coupled with a more nuanced understanding of how housing markets are segmented into mosaics of submarkets based on race and class (see Bernt, 2022). Although rarely explicitly engaging in Marxian rent theory, this work recognizes that the dynamics of monopoly or oligopoly are much more prevalent than typically acknowledged by mainstream economists (e.g. see Teresa and Howell, 2021). As such, it should not be surprising that increasing supply does not necessarily lead to falling rents (Appelbaum and Gilderbloom, 1983; Asquith, 2019b; Beitel, 2016; Damiano and Frenier, 2020; although, see Li, 2019; Rodriquez-Pose, 2023). Indeed, increasing supply often leads to an increase in prices (see Bernt, 2022), and as Giles (2017) observes in the case of Seattle, increasing vacancy rates in the downtown core unfolded alongside increasing prices, contrary at least to conventional supply and demand logic (also see Anderson et al., 2022a).

Other studies expose the faulty assumptions and methodological sleight-of-hand that are often presented as evidence against rent control, such as Turner's (1990) study purportedly linking rent control to cities with high levels of houselessness. Appelbaum et al. (1991) deconstruct Turner's methodology to reveal selection bias in the cities that were included in his study, leading him to misinterpret his own findings, among other basic research design flaws. In short, because some cities with rent control also have high levels of houselessness does not mean that houselessness has anything to do with rent control (also see Gilderbloom and Appelbaum, 1992). Indeed, rent control is usually a response to the high prices which lead to houselessness in the first place (Colburn and Aldern, 2022).

Arnott (1995) noted that most economists adopt traditional views about the impacts of rent control which are based on predictive models plagued by an imagined reality informed by simplistic assumptions about human behavior (e.g. as rational actors) coupled with, as noted above, scant empirical evidence (beyond the irregular case of New York). But what little evidence exists (i.e. San Francisco and Boston) has been assumed to apply universally by other commentators and journalists, with the results often selectively interpreted. This problem is perhaps best articulated by Yi-Fu Tuan (1977: 203) in the following passage:

The scientist postulates the simple human being for the limited purpose of analyzing a specific set of relationships, and this procedure is entirely valid. Danger occurs when the scientist then naively tries to impose his findings on the real world, for he may forget that the simplicity of human beings is an assumption, not a discovery or a necessary conclusion of research.

Scholarship on the sociology of housing markets is typically nowhere to be found in the mainstream economic critique of rent control or the public discourse that channels this critique through the media to legislators and the public. Also ignored in the mainstream economic account are the conflicting studies that show that rent control leads to decreases in gentrification (Gross, 2020), or the “very substantial evidence that rent control brings down rents and, when acting in tandem with other progressive policies that are geared toward tenants and the use values of homes and land (not the exchange values preferred by landlords and the housing industry) … [rent control] makes a serious dent in the high cost of housing more broadly” (Slater, 2021: 708). Instead, frequent citation of famous quotes often stands in as evidence, such as Lindbeck's famous assertion that “rent control appears to be the most efficient technique presently known to destroy a city except for bombing” (cited in Perrie and Block, 2018: 51).

While scholarship on the sociology of housing markets is extensive and recognizes the role of monopoly dynamics in the housing sector, it rarely engages with the categories and concepts of Marxian rent theory. Conversely, scholarship in Marxian rent theory has yet to substantively address the dynamics and implications of rent control. As we present in the following sections, bringing these two bodies of scholarship into closer dialogue in the context of the concept of CMR can further advance the critical deconstruction of landlord opposition to rent control in important ways.

The pursuit of CMR

The notion of CMR emanates from Harvey's (1974) pivotal study of housing submarkets in 1970s Baltimore. It is rooted, however, in Marx's (1981, 2015) incomplete writings on rent which were based in the agricultural context of early capitalism. Much of Marx's attention is devoted to Ricardo's (2004) understanding of differential rent (DR), conceptualized as a distribution of profits from capitalist tenants to landowners with the magnitude of rent based on the differential fertility of the soil over and above the most marginal land in cultivation. For Ricardo, all rents were DR, and the most marginal land commanded no rent. But Marx recognized that even the most marginal land in cultivation did yield rent, otherwise it would not be in cultivation. This baseline amount of rent could not be accounted for by the concept of DR. From here, two additional categories of rent based on the dynamics of monopoly have been derived from Marx's (1981) writings based on the dynamics of monopoly: monopoly rent (MR) and absolute rent (AR) (see Haila, 1990, 2016; Harvey, 1974, 1982; Park, 2014; Ward and Aalbers, 2016).

In the case of MR, if a landowner has exclusive ownership over some resource or attribute on their land that cannot be found anywhere else, then the landowner has a monopoly and can lease their land to whoever is willing to pay the most in rent. In short, the proportion of rent attributable to this non-substitutable quality can be classified as MR, as there are no other landowners able to compete for the same tenants. AR, on the other hand, is based on the power of landlords to form barriers to capital entry in the market. If a landowner cannot command the least amount of rent deemed “socially acceptable” by landowners in a given socio-spatial context, they will often find it beneficial to withdraw the land from circulation and wait until they can find a tenant able and willing to pay at least the minimum. The implication is that the aggregate effect of landowners doing this individually augments the rents for all landowners operating in the market by restricting/reducing supply. This should sound familiar.

Here, by virtue of the private property institution, landowners can collectively manipulate supply/demand conditions to ensure that each are able to realize at least the socially determined minimum return in a given place and time. As such, AR functions, at least, as this baseline level of rent, or “reservation price” (which varies across socio-spatial contexts), determined collectively by landowners acting as a class before differential values are considered (for recent and more substantive reviews of Marxian rent theory, see Haila, 2016; Manning, 2023; Park, 2014; Swyngedouw and Ward, 2023; Ward and Aalbers, 2016).

Harvey (1973, 1974; Harvey and Chatterjee, 1974) was among the first to apply and rework Marx's ideas to the urban context. Harvey (1974) introduced the notion of CMR in the process of examining the ways in which slumlords in 1970s Baltimore withdrew rental units from circulation that would have otherwise cost more to maintain, resulting in the simultaneous increasing of rents and vacancies, the very phenomenon noted above by Giles (2017) in the context of gentrification in central Seattle. Why invest in maintaining a unit only to rent it out at a loss or below the minimum when you could keep it unoccupied, or, as Evans (1999b) notes, wait until rents increase before committing to a lease? We argue that converting rental units to owner-occupied be considered as another potential reason for reducing supply in the rental market, as landlords collectively threaten that this is what they will do if rent control legislation is passed.

Harvey (1974) substitutes CMR in place of AR to represent the proportion of rent attributable to this scarcity-producing behavior, having deemed Marx's notion of AR “inappropriate” to the case (Sheppard and Barnes, 2019: 207). It should be stressed that a key feature of the pursuit of CMR is that landlords do not necessarily have to be acting in collusion. Landlords are not a class of actors only because they are all landlords, but following Harvey (1974, 1982), insofar as they are compelled by the capitalist imperative to treat their land as a financial asset, acting individually is enough to yield CMR as the portion of rent attributable to the aggregate effect of landowners individually manipulating supply/demand conditions until reservation prices are realized (also see Anderson, 2014, 2019; Anderson et al., 2022a; Manning, 2022; Mau, 2023; Wyly et al., 2012).

A significant debate in urban studies erupted in the 1980s about the prevalence and even legitimacy of CMR as well as the applicability of the categories of rent to the urban context in general (for extensive reviews of this debate, see Haila, 1990, 2016; Manning, 2023; Park, 2014; Ward and Aalbers, 2016). This debate, however, was also marked by notable confusion surrounding the distinctions between AR, CMR, and MR. ¹ It should also be reiterated that MR, AR, and CMR have been almost entirely unacknowledged by mainstream (neoclassical) economists. And when they have been recognized, their legitimacy is either disavowed or significantly downplayed (see Evans, 1991, 1993, 1999a, 1999b; Foldvary, 1993; Garza and Lizieri, 2019; Houghton, 1993). For the sake of brevity and clarity, we interpret AR and CMR to be the same thing. We follow Anderson's (2019; Anderson et al., 2022a, 2022b; Anderson and Arms, 2023) use of the CMR label because it explicitly highlights the role of both class and monopoly in this form of rent, as well as the significant volume of recent scholarship advanced under the banner of CMR, though we acknowledge that the AR label could arguably be just as legitimately employed in the context of this paper. ²

Due to this theoretical confusion and a variety of other reasons (see Manning, 2023; Park, 2014; Ward and Aalbers, 2016), Marxian rent theory (with the exception of Smith's [1996] rent-gap thesis) experienced notable stagnation in the 1990s, only to be revived in the 2000s and 2010s by a series of reviews (e.g. Anderson, 2014; Haila, 2016; Park, 2014; Ramirez, 2009; Smet, 2016; Ward and Aalbers, 2016) and empirical examinations that extend and widen the applicability of the theory in a variety of contexts (e.g. see Aalbers, 2016; Aalbers and Christophers, 2014; Andreucci et al., 2017; Baxter, 2014; Beitel, 2016; Christophers, 2019, 2021, 2022; Purcell et al., 2020; Strauss, 2021; Tapp, 2020; Taylor and Aalbers, 2022; Tretter, 2020; Ward and Swyngedouw, 2018). Manning (2023) provides an extensive review of this revival.

Most noteworthy for our purposes is a surge of recent scholarship that re-engages with the dynamics of CMR, which has nuanced our understanding of the myriad ways in which supply can be restricted. In the context of gentrification, Anderson (2014, 2019), Harvey (2012), and Tretter (2009) show that when certain neighborhoods are “branded” as exclusive, unique, upscale, etc., then perceptions of “non-substitutability” can be discursively choreographed by property owners/producers and cultivated in the minds of prospective gentrifiers despite otherwise substitutability (also see Charnook et al., 2014). “Such neighborhoods,” to Anderson et al. (2022a: 1115), “become effective monopolies characterized by a finite supply of housing,” a “scenario [that] can be actively controlled by property owners/producers working in tandem to not just limit supply but also enhance demand within a territorially defined submarket.”

More specifically, Anderson (2019) reveals that Portland's Pearl District has been redeveloped by a handful of developers who have admittedly worked together to control supply and brand the neighborhood as unlike any other. The developers operating within this “cartel” have tended to monopolize certain submarkets (i.e. lofts vs. new condos) and price points within the Pearl District such that nobody is competing for the same prospective buyers, and particular developments have been timed to ensure that only so many units come on the market at any given moment. This has been done to not just ensure acceptable minimum returns, but to maximize what constitutes the minimum return: reservation prices are effectively raised.

In this context, the submarket boundaries act as barriers to capital entry, effectively rendering them “absolute spaces” that each cater to narrow segments of consumers, thereby constraining supply elasticity in each submarket. As such, the logic of supply and demand only makes sense in the context of what Harvey (1974) terms the “island-like” structure of submarkets as not all buyers are competing for the same housing units across an entire urban region, with the most marginalized, low-income populations trapped in what are effectively predatory submarkets dominated by slumlords (also see King, 1989). Drawing on the case of Atlanta, GA, Teresa and Howell (2021) reveal this very dynamic in relation to the geographies of eviction.

Revington (2021) reveals a similar dynamic among student housing “districts” adjacent to a university campus in Waterloo, Canada, and the stockpiling of vacant land by the local state as a speculative act has been observed elsewhere (see Anderson, 2014). Moreover, Butcher (2020) examines the ways in which developers in South Africa have cornered the market for middle-income tract housing, whereas Tapp and Peiser (2023) identify a significant degree of anti-competitive “horizontal shareholding” among the limited global investment firms that are increasingly monopolizing the low-income rental housing stock across the US.

Anderson and colleagues have extended the theory of CMR to implicate the formation of business improvement districts (Anderson and Arms, 2023), historical preservation districts (Anderson, 2014), and tax-increment financing districts and urban sustainability practices (Anderson, 2019; Anderson et al., 2022a). Perhaps most important for this intervention is Anderson et al.'s (2022b) analysis of the ways in which the very same cartel of developers in Portland's Pearl District have collectively lobbied and threatened to sue the City of Portland for considering the placement of homeless shelters in the Pearl District. Here, class monopoly power is enacted to spatially manage where homeless shelters and encampments can be located, preserving their mutual interests and commitment to what can be termed a regime of CMR. Extending this body of scholarship, we argue that landlord associations adopt a similar defensive tactic in their opposition to rent control as a means of preserving acceptable profit margins.

It should be noted, however, that even among Marxist scholars there remains disagreement about the legitimacy of CMR. ³ But our objective is not to prove the existence of CMR, but to further discredit the landlord opposition to rent control. The next section exposes the ideological and empirically vacuous content that underpins the deployment of class monopoly power by landlord associations to preserve existing rates of return that might otherwise be reduced if rent control measures were enacted.

Landlord opposition to rent control in Oregon

Despite the near complete lack of recognition (or otherwise dismissal) of CMR by mainstream economists, it has not stopped both economists and coalitions of real estate interests to threaten that pursuing CMR is precisely what landlords will do if rent control legislation is enacted. It is also presumed that the realization of this pursuit of CMR is a certainty. In the context of Oregon's rent control legislation, a coalition of nearly every major real estate actor in Oregon argued that the number of rental units would decline due to landlords cashing out by selling their properties and that developers would be disincentivized to produce more housing, ultimately rendering the legislation counter-productive by resulting in higher rents via this reduction in supply. While this coalition, of course, does not explicitly admit to validating CMR, this is effectively what they are describing.

Before passing in 2019, House Bill 2004 (HB 2004) was forcefully opposed by this coalition. The bill barely passed in the House before failing in the Senate, as house republicans and several Democrats argued that “the legislation would exacerbate Oregon's housing crisis by pushing property owners out of the rental market and shrinking the supply of available units…” (KVTZ News, 2017). In particular, Bill Kennemer, Oregon State Senator (quoted in KVTZ News, 2017), stated that the bill “would reduce the number of rentable units on the market, disincentivize investment in units that remain on the market, and would ultimately lead to an even less affordable future.” This argument was routinely propagated by actors representing landlord associations, such as Tia Politi, President of the Rental Owners Association of Lane County, OR: “… the proposed legislative solution offered by [HB 2004] creates a draconian punishment for all rental owners that will result in less available and affordable housing for all” (quoted in her public testimony, 2017).

However, with the shift to a democrat-majority senate after the 2018 elections, a very similar though less aggressive Senate Bill 608 (SB 608) was introduced in 2019 which passed, effectively eliminating no-cause evictions (after 12 months) and instituting rent control measures statewide. SB 608 limits annual rent increases to 7% (plus inflation), more generous to landlords than the 5% sought in HB 2004. SB 608 also requires landlords to pay relocation fees for tenants who are evicted through no fault of their own under certain conditions (see Monahan [2019] for details). In the end, SB 608 was negotiated with landlords to keep them in the game and to ensure less contestation this time around (Straub, 2019).

Although SB 608 did not receive the full opposition from the real estate industry as HB 2004 (as the coalition knew they no longer had the Senate votes), the usual arguments resurfaced, with the Oregon Association of Realtors positing that economists “nearly universally agree that rent control programs reduce the supply of housing units” (quoted in KOBI-TV NBC-5, 2019). Frequent reference to the consensus of economists was in full effect:

Liberal and conservative economists both have understood these impacts of rent control for decades … Fixing rents below market levels gives the false signal that housing is plentiful. That ensures a shortage, with demand for rental property exceeding supply. Landlords find converting properties to other uses more attractive and developers find new rentable accommodations less profitable to build, compounding this scarcity problem (Bourne, 2019).

This passage above is particularly striking as it describes in detail how landlords supposedly react, drawing on the powers afforded to them via the private property institution to ensure the most attractive rate of return, even if it means creating an artificial scarcity in the rental market by converting rental properties to condominiums. In short, the passage describes how rent control triggers landlords to remove units from circulation in the rental market, an example of the kind of supply reduction that CMR is all about.

This frequent reference to the consensus of economists, however, is rarely substantiated:

Yet, study after study has shown that over the long term, rent control only contributes to the problem. They've found that rent control reduces the quality and number of rentals on the market… (Rosalsky, 2019).

Conspicuously absent in the above press release is the citation of the actual studies to which the author alludes. Moreover, a report by economists from Portland State University's Center for Real Estate on the impacts of SB 608 hinge on the very same unsubstantiated claims:

Most economists believe that rent control in practice is an ineffective and misguided tool, providing a bandaid to incumbent renters while making the underlying housing supply shortage even worse … The last thing we want to do now, is further restrict the supply of new housing, which is exactly what rent control will do (Reeves, 2020: 2).

That economists believe this to be true is evidently enough evidence to end the discussion. In this report, both Reeves (2020) and Lawler (2020) proffer the usual market fundamentalism that informs this persistent attack on rent control:

Rent control often triggers a harmful response from landlords who become unable to increase rents at a rate necessary to keep up with adequate building maintenance and inflation … landlords will neglect routine upgrades to the building and property, or even begin converting the building to a property use not governed by rent control, such as the conversion to condominiums … By reducing the scope of their projects, this reaction will reduce housing supply further, causing rents to continue to rise (Reeves, 2020: 3).

We note that both authors are listed as fellows with the landlord organization, Multifamily Northwest, rendering their “expert” testimony anything but unbiased (they are also ignoring, potentially on purpose, that SB 608 allows for rent increases that account for inflation). Indeed, that economists and journalists are effectively “bought-off” in this way constitutes their cooptation and incorporation into such landlord-based regimes of CMR.

It is also worth noting the more general “dubious logic” these arguments rest upon, following Slater (2021: 706):

The logic implies that curtailing of the profits to be made from a sector will simply stop people investing in it. This is akin to believing that the minimum wage means companies stop employing people; that sales tax means nobody sells anything anymore; that fuel tax means nobody drives … and there is no robust evidence from anywhere to demonstrate this happens.

The statewide legislation in Oregon was initially prompted by the City of Portland's move to enact rent control measures in 2017, despite the lack of statewide enabling legislation at the time which resulted in lawsuits from landlord organizations, such as Multifamily Northwest (Floum, 2017). Portland landlords responded by arguing “that the policymakers failed … to consider that small landlords will consequently sell their property, further limiting Portland's housing supply” (Floum, 2017). Moreover, Floum (2017) reported (and effectively threatened) that “the new policy will cause [Kelly Goss, Portland landlord] to sell his properties, a move he says will make him millions of dollars and cause his tenant's rents to spike.”

While the real estate industry recognized the worsening housing crisis, the blame was placed squarely (and conveniently) on too much costly government regulation (e.g. development fees), handicapping private landlords and developers from making sufficient profits and, thus, according to Multifamily Northwest, increasing the “construction of more affordable and market-rate housing” (Gutierrez, 2017). In short, the crisis was explained simply as an imbalance of supply and demand brought about by too much government:

Our state's affordability crisis is the product of a basic breakdown in the laws of supply and demand … it is long past time for us to pursue policies that will lead to an increase in the supply of affordable housing in communities across the state and drive down rents in the process. By eliminating barriers to construction and development today, we can make progress toward a more affordable tomorrow (Gene Whisnant, State Representative, quoted in KVTZ News, 2017).

This logic stems from the persistently pervasive “neighborhood filtering” theory which holds that if we just build more housing at all levels, which is convenient for developers and builders who prioritize high-end housing as it is the most profitable, the mere boost in supply will bring down rents to all housing units, a logic informed by the problematic and overly-simplistic notion of a single housing market for an entire metropolitan area. The empirical reality that this often does not happen, as we have reviewed above, and that housing markets are intricately segmented into complex mosaics of submarkets, supported by notable evidence from scholarship on both CMR and the sociology of housing markets (see Teresa and Howell, 2021), is conveniently not recognized.

That the mainstream (neoclassical) economic tradition either ignores or disavows any notable possibility of CMR on the one hand, and then predicts with certainty the widespread pursuit of CMR by landlords in response to rent control on the other, reveals a contradiction. Yet, following Bonefeld (2014), mainstream economics has no content beyond the willingness to say anything in support of profitmaking in any given scenario. Insofar as this is a contradiction, it does not appear to be one that they care about (assuming they are aware of it in the first place). This reality, we argue, further exposes this purportedly “scientific” argument as rooted in an ideologically driven, class-biased, and morally bankrupt market fundamentalism that selectively chooses when certain concepts, even Marxist concepts like CMR, are valid as a matter of political expediency. More importantly, of course, is the fact that the argument does not appear to be true, rendering it nothing more than an empirically impoverished tactical weapon in the politics of persuading elected leaders to strike down rent control measures when proposed.

Conclusion

In this article, we have extended the criticism of the economically motivated opposition to rent control among landlord organizations and mainstream economists by developing the argument that this opposition constitutes the strategic weaponization of the pursuit of CMR as a means of combating rent control legislation. According to Perrie and Block (2018: 50), rent control induces “a lack of incentive for people to enter the market … it will also act as a push factor to induce current investors to place their money elsewhere” (out italics). The pursuit of CMR is precisely what is described as the reason “for the shortage” that purportedly ensues in response to rent control. Yet, we argue that the absence of systematic substantiating evidence for this behavior reveals this to be less an empirical reality than an act of politics disguised as “objective science.” Indeed, the argument against rent control might entirely be based on the fictional world of the neoclassical economist. It is in this context that we highlight the politics of CMR as a dynamic in its own right, and the importance of countering this politics to reveal the ideological and political content that strikes at the core of this opposition.

It is in the spirit of this counter-politics that we offer this paper as a resource for tenant rights activists and legislators who must inevitably confront this opposition. The counter-reply from landlords and mainstream economists is almost assured that the pursuit of CMR in this context is a consequence of the perversion of market dynamics by obtrusive government regulation and, hence, an exceptional circumstance to the norm. But why not advocate for more effective regulation of landlord behavior? And, following Slater (2021), the argument against rent control can just as easily sound like an argument in favor of more public housing, which is usually rejected just as forcefully by the same real estate interests. Indeed, while public housing has been disastrous in the US (Hall, 2014), this has certainly not been a universal outcome globally; if anything, the experience of the US is the exception to what is often a much more heavily invested and celebrated public resource in other countries (e.g. Western Europe) marked with notably more affordable housing options for a much wider segment of their populations.

In this context, the opposition to rent control is often situated implicitly within another imagined reality: where the world ends with the boundaries of the US. Once we adopt a global perspective we are confronted with a very different reality, where 90% of the rental market is subsidized to varying degrees in the Netherlands (Conley, 2018), where tenant rights legislation akin to rent control is administered at the national scale in Japan (and where housing prices are far less than in the US) (Reiddy, 2022), and where public housing is almost always in far greater supply across the rest of the industrialized world.

The experience of the rest of the world is usually ignored in the US-centered opposition against rent control on the grounds that it is not applicable to the US (e.g. see Sturtevant, 2018). But if we were to apply this argument against rent control elsewhere, one would expect cities such as Amsterdam, Tokyo, Copenhagen, or Vienna to be massive slums akin to war-torn, bomb-cratered landscapes. That this is obviously not true should itself prompt reconsideration of these arguments. Indeed, gentrification and major redevelopment projects have been prevalent in each of these cities (i.e. Barker, 2022; Fujitsuka, 2005; Kirmizi, 2019, 2023; Larsen and Hansen, 2008; Pinkster and Boterman, 2017), something that mainstream economists usually support and depict as good (and which would only be threatened by rent control legislation).

Vienna, Austria is among the biggest public housing producers in Europe, and hardly resembles the tenement housing projects that marked the US experience in that the buildings are much better funded and maintained. Public housing in Vienna is also not nearly as stigmatized (Rudick, 2023), as it constitutes up to 44% of the total housing stock in Vienna as of 2019 (Anderson, 2023). Moreover, 77% of Vienna's private rental market is subject to rent control (H4A, 2023). Yet, Vienna, with twice as many people as San Francisco (1.9 million to 887,000), has three times as many housing units in total (1,050,000 compared to 340,140), and a quarter of San Francisco's unhoused population (Rudick, 2023). This has a lot to do with the fact that a much higher share of Vienna's housing stock is affordable to low-income populations due to government intervention and more favorable tenant rights legislation (Anderson, 2023), the very thing that will purportedly destroy our cities in the US according to landlords and economists.

The free-enterprise system has never delivered housing affordable to low-income populations in any meaningful way, at least without substantial public subsidies. We have known this for over 100 years (Hall, 2014). This is the reason public housing was developed in the first place, due to the inherent conflict of interest in the private housing market in developing housing affordable to the lowest-wage earners: there is no incentive to do this because every other type of housing promises greater profitability in a capitalist economy unless sufficient subsidies exist, subsidies that have systematically eroded in the US since the ascendency of neoliberal hegemony in the 1980s (Harvey, 2005). This conflict of interest is strikingly on full display when landlords and mainstream economists lobby against rent control. In fact, when landlords oppose rent control they are quite vividly and wonderfully describing why they should not be in the business of providing affordable housing to low-income populations. Due to the resilience of neoliberal hegemony, we suggest that the public discourse in the US on housing affordability and houselessness is afflicted with an acute case of “historical amnesia,” preventing the necessary policy reform from being considered politically feasible (if recognized at all).

Examples of a housing market characterized best by the kind of free enterprise system championed by anti-rent control economists, that is, Glasgow in 1900, have proven to be horrific, where “rents were high and conditions were dismal, with slumlords cramming tenants into stairwells, courtyards, and alleys—denying them access to light, water, or dignity” (Slater, 2021: 705). We conclude by arguing that if the industrial capitalists of Nineteenth Century England recovered from the preposterous and outrageous legislation that mandated that every child receive an education rather than toil away in a horrific and unregulated factory to the tune of a vastly reduced life-span, as famously reported by Marx (1976), then perhaps private landlords can make do with rent control to protect low-income renters who might otherwise be rendered houseless in one of the most affluent countries in the world. If the former seems outrageously scandalous today, we suspect and hope that the unabashed mobilization of class monopoly power by landlords deconstructed in this paper might sound similarly outrageous to future generations.