By: Karrie Kirschenmann
On October 8, Governor Gavin Newsom limited the rent increases for a decade for some tenants of rental properties across the state in an effort to combat the housing crisis. This bill is meant to benefit the homeless and low-income tenants in California.
Newsom signed the bill in Oakland, where a recent report documented a 43 percent increase in homelessness over the past two years. Democrats claim that rent increases have enlarged the problem. This bill will only affect about eight million of the 17 million renters in California.
The bill limits rent increases to five percent plus inflation each year and will be in place until January 1, 2030. Oregon and California are the only two states in the country to place limits on rent increases. In Oregon, the limit is an increase of seven percent plus inflation each year.
When Newsom was addressing President Trump’s criticism of the problem to housing advocates in Oakland, he sneered that Trump’s “exploiting it. You’re trying to solve it. That’s the difference between you and the president of the United States.”
Governor Newsom’s ignorance of the actual problem is disturbing. President Trump understands that rent increases benefit the economy. Allowing landlords to increase their rent encourages them to build more houses which boosts the housing market. Per the rule of supply and demand, if more housing units are built, a glut in the market will naturally cause rent rates to fall.
If the rent rate increases, tenants are also encouraged to apply for well-paying jobs. This trickles down to students as well. If students know they will need a high-paying job to afford their rent, they will be more likely to work harder and go to college. Increasing rent boosts the economy because it creates innovative members of society, determined students, and more housing supply.
Newsom’s new law only caters to those who do not apply themselves and furthers society’s laziness crisis. If the bar to reach is higher, such as higher rent, the tenant will reach higher to grab it. The economy is positively affected if the people have an incentive, such as living comfortably in their homes.
