Economists are in the midst of a vigorous debate about the causes and likely duration of the uptick in inflation that we’ve seen in recent months. If policymakers want to alleviate the price increases facing families, they would be wise to start with the single biggest line item in household budgets: rent. Taking on our country’s enduring rental affordability crisis should be a top priority, one that will not be accomplished by contractionary monetary policy.
History shows us we cannot expect the private market to develop or sustain affordable housing to meet the needs of millions of people. Instead, ensuring stable shelter for all will require major investment and a reshaping of public power in our housing markets.
In “No Room for Rent: Addressing Rising Rent Prices through Public Investment and Public Power,” Sammi Aibinder and Lindsay Owens explain that to take on the rising cost of rent, policymakers should:
- Fund a major increase in the supply of affordable housing, especially social housing— alleviating supply constraints that have been at the center of increasing rents for decades—and by extension, work with municipalities to adopt new forms of zoning regulation that can enable that increase in supply of affordable housing; and
- Pursue rent stabilization policies (i.e., rent control) to curb future price hikes and rent profiteering.