Kamala Harris' Promise To 'Take On Corporate Landlords And Cap Unfair Rent Increases' Is A Hit With Voters But A Miss With Economists

At her first big rally as the Democratic front-runner, Vice President Kamala Harris threw down the gauntlet: she vowed to "take on corporate landlords and cap unfair rent increases." In front of 10,000 supporters in Atlanta, Harris pushed a bold idea: limit rent hikes to 5% for two years for landlords with over 50 units. 

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This proposal is closely aligned with a plan recently put forth by the Biden administration. That plan aims to curb rising rents while more housing is under construction. The Biden plan, however, would exempt newly built units to avoid discouraging development. Harris did not address this nuance in her speech. The proposal targets corporate landlords and is seen as a way to provide immediate relief to millions of renters, particularly in markets where housing affordability is increasingly dire.

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Her message is hitting home with voters squeezed by rising housing costs. A May poll from Navigator, a Democratic-aligned group, showed broad support for curbing rent gouging by corporate landlords. These voters are crucial to the Democratic base. But while it's scoring points on the campaign trail, economists are sounding the alarm about the plan.

Most economists say rent control, like Harris's plan, often does more harm than good. A review of over 200 studies on rent control revealed many negative consequences: lower housing quality, less availability, and a slowdown in new construction. Rent caps can shrink the housing supply and make conditions worse in existing rentals.

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Even some Democrats, like Colorado Gov. Jared Polis, warn that Harris's approach could backfire, deepening the housing crisis it aims to fix. They argue that the real solution is to build more affordable housing, not just cap rents.

"Rent control has been about as disgraced as any economic policy in the tool kit," Jason Furman, the Obama administration's top economic adviser, said recently to the Washington Post. "The idea we'd be reviving and expanding it will ultimately make our housing supply problems worse, not better."

Harris is banking on the political power of rent control to overshadow these concerns. With more than 22 million American households spending over a third of their income on rent and mortgage rates rising recently, the housing crisis is intensifying. Harris may face increasing pressure as her campaign progresses to reconcile voter demands with the economic pitfalls critics highlight. Whether this gamble pays off at the polls or triggers long-term problems for the housing market is still up in the air.

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