Rent Control Roulette: A Cautionary Tale for Blue Cities
When Short-Term Relief Masks Long-Term Damage
Los Angeles just capped annual rent increases at 4% for certain stabilized units. On paper, it sounds compassionate. Who doesn’t want to shield renters from rising prices? But scratch below the surface, and you’ll find a deeper rot: a city failing to confront the real causes of its housing crisis.
Mauricio Umansky—no right-wing firebrand, just a man who’s spent decades inside L.A.’s property markets—called it a “tremendous mistake.” And he’s not wrong. Rent control can temporarily hold down prices for existing tenants, but it does nothing to increase supply. Worse, it discourages new development and pushes landlords out of the game. Fewer units, higher demand, skyrocketing prices—that’s the cycle. It’s math, not politics.
The Supply Squeeze: How Cities Choke Themselves
You want affordability? Build. You want housing security? Deregulate. The only thing that’s ever solved a housing shortage is creating more homes. Yet California’s cities layer restriction upon restriction—zoning laws, permit delays, environmental reviews that drag for years. The result? A system where only the mega-wealthy or institutional developers survive, and even they’re starting to eye the exit.
Umansky’s plea is simple: cut the red tape, offer tax incentives to builders, and let the market work. It’s not ideology—it’s survival. And every other city from Seattle to New York should be watching this unfold, because it’s a preview of what happens when governments treat housing like a static resource instead of a dynamic ecosystem.
Tax the Rich, Starve the State?
Meanwhile, California’s answer to a shrinking middle class and ballooning expenses is—you guessed it—more taxes. The proposed wealth tax would hit individuals with $50 million or more at 1%, and those with over $1 billion at 1.5%. Sounds like justice, right? Until you realize how mobile the wealthy are.
They’re already leaving. And when they go, they take jobs, investments, and tax revenue with them. Umansky, like many others, warns this isn’t just a trickle—it’s an exodus. The result? A state with fewer resources, deeper deficits, and more pressure to squeeze what’s left of its productive base. This isn’t some libertarian fever dream—it’s Census Bureau data. Nearly 340,000 Californians left between 2022 and 2023 alone.
Safety, Sanity, and the California Mirage
Beyond housing and taxes lies the broader crisis: safety, infrastructure, livability. Umansky didn’t mince words—California’s got charisma and climate, but it's bleeding out on the basics. Affordability is gone. Streets are unsafe. Budgets are bloated and imbalanced.
These aren’t partisan attacks. These are metrics. And for cities across the country leaning into similar policy paths, they should serve as a stark warning: if you don’t address root problems, the decay will come for you too.
A Middle Path or a Dead End?
What’s the alternative? Not necessarily a red wave, but maybe a reset. Umansky floated the idea of centrist or independent leadership—someone who understands fiscal balance, urban planning, and the mechanics of a thriving economy. Because let’s face it: ideological purity won’t pay the bills, house your residents, or keep them from packing up for Texas.
Lessons for the Next City on the Brink
To mayors in Chicago, Philadelphia, Portland, and beyond: watch Los Angeles. Study its mistakes. Don’t wrap your housing crisis in good intentions while ignoring the cold economics underneath. Rent control won’t save you. Overregulation will strangle you. And punitive taxes will gut your future.
There’s still time to change course. But once your middle class is gone, they don’t come back.
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