Vice President Kamala Harris recently proposed a nationwide rent increase cap of five percent and the abolition of algorithmic pricing software used by landlords, as part of the Democratic National Committee platform. However, California residents have rejected rent control measures in the past due to negative consequences such as reduced housing supply and increased economic inequality. Despite this rejection, Vice President Harris aims to implement these policies, which could have damaging effects on the housing market and AI innovation in California.
While Vice President Harris believes these actions are necessary to combat landlord collusion and price gouging, recent data shows that rental rates in California have been decreasing. The solution to the housing and inflation crises, both nationally and locally, lies in increasing housing supply rather than government price-setting. Governor Newsom has pledged to build millions of new housing units in California, and Vice President Harris has included this in her economic package as well.
By encouraging development, streamlining approval processes for new projects, and reducing regulatory burdens on builders, California and the nation could naturally reduce shortages and make homes more affordable. Price controls may seem like a quick fix, but they could worsen the problem. If Vice President Harris is elected and decides to move forward with these plans, the California congressional delegation is expected to push back against them. Ultimately, allowing states to determine their own housing policies would be a fairer approach.
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