Culinary Union unsure of fiscal impact of Neighborhood Stability Ordinance | EDITORIAL
It is hoped that those who support a new law would have an idea of its fiscal impact. That doesn’t seem to be the case with Culinary Union Local 226 and its rent control proposal.
On Wednesday, the North Las Vegas City Council considered a financial impact statement on the Neighborhood Stability Ordinance. It’s the Culinary’s rent control system. This would limit annual rent increases in North Las Vegas to the rate of inflation or 5%, whichever is lower. The Culinary said it collected enough signatures to put the measure on the November ballot.
Union officials say this intervention is necessary because rents have increased by 25% in 2021. Housing prices are certainly rising. The inflationary policies favored by President Joe Biden and the Democrats are hurting Americans, especially those on low incomes.
But the effects of rent control would be considerable. It’s not a new idea. It has been tried unsuccessfully for decades. Still, North Las Vegas staffers did their best to estimate the tax impact of the proposal, citing an article from the liberal Brookings Institute. “One study found that rent control reduced property values by an average of 1.8% per year,” the proposed budget impact statement reads. “If we assume the same percentages in North Las Vegas, the result would be an average property tax revenue loss for the city of $3.2 million per year.”
It didn’t go down well with the Culinary. He was successful in asking the board to delay passing any ballots containing such information. But what alternative do union officials offer? They didn’t offer any, instead asking for more time to work with city staff.
This is a short-term approach to policy development. Rent control has benefits for a specific subset of people – current tenants. It also has a long series of negative downstream effects, including on future tenants. Promoting an understanding of the benefits and costs of a proposal is common sense and helps ensure that voters can make informed decisions. But the Culinary isn’t known for its concern for long-term consequences.
Experienced politicians, such as Gov. Steve Sisolak and Rep. Steven Horsford, should know more. Yet both support the movement. “We need to have everything on the table when it comes to addressing the greed of business owners,” Governor Sisolak said. It is suspected that Governor Sisolak knows more. If he really thought rent control was working, he would call a special session to enact it. Or he would have demanded it at a previous regular session. He did not do it.
Whatever political benefits this effort brings, Governor Sisolak will not reduce the destructive impacts of this policy. Those who want to reduce housing costs should demand that governments adopt policies that encourage the development of more housing. Rent control does the opposite.