Written by William E. Trachman, General Counsel for Mountain States Legal Foundation
Published November 13, 2024
In Hollywood shows like “Friends”, the idea of rent control—where a landlord can’t charge the fair-market value for an apartment — is often portrayed favorably. Without it, the heroes could never survive living in an expensive place like New York City. But the reality of rent control is never part of the Hollywood narrative. Apart from the obvious infringement on an owner’s property rights, the truth, actually, is that preventing owners from charging fair-market rates hurts renters by limiting the supply of apartment units.
Fortunately, Colorado has done the right thing when it comes to rent control — it has mostly outlawed it, by preventing localities from adopting such measures. Though some state legislators unsuccessfully attempted to repeal the prohibition in response to a recent spike in rental prices, they failed because their colleagues recognized repeal would in fact worsen an already difficult housing market.
Though it’s too charitable, unfortunately, to attribute the legislature’s rejection of rent control to a legislative commitment to property rights, most lawmakers and economists agree imposing rent control has an unintended consequence — it causes the supply of units to quickly dry up, ultimately creating scarcity and instability in the rental market, as owners see the prospect of becoming a landlord less appealing.