Opinion | Michigan needs rent relief. What can be done?

Renters in Michigan are taking it on the chin. In the past year, rental prices have skyrocketed almost 10%, giving the Great Lakes State the dishonor of having the nation’s second-largest increase in rental costs.

That is why, according to a recent Center for Popular Democracy poll, over 50% of Michigan voters have reported seeing politicians discuss housing and rent costs on the campaign trail, with three-quarters of respondents stating that addressing these concerns would improve their well-being. As both the Harris and Trump campaigns focus on the critical battleground state of Michigan, they know that creating clear housing policies to assist renters will resonate with voters.

In July, in response to this noise, the Biden-Harris administration proposed a price cap on rent prices nationwide. In tandem with this White House proposal, Michigan leaders are trying to lift the state’s current ban on rent control.

Politicians and regulators have also tried to ban landlords from using software that predicts and forecasts what they should charge their tenants. Chris Douglas, an economics professor at the University of Michigan-Flint, already noted how this idea is counterproductive.

The problem with all these initiatives is that landlords and their technology preferences have nothing to do with the broader microeconomic trends (like inflation and the new, costly building regulations that the Biden administration is seeking to remove) that have forced them to increase prices.

In other words, our political leaders are taking direct aim at landlords rather than the marketplace conditions that have caused them to adjust their rates and make vulnerable Michigan families pay through the nose.

Renowned socialist economist Assar Lindbeck once remarked, “In many cases, rent control appears to be the most efficient technique presently known to destroy a city – except for bombing.” He was right then, and he’s right now. Rent control distorts the market, creates housing shortages, and leads to reduced maintenance of existing properties, diminished incentives for new construction, and ultimately higher rent prices over time.

When the government artificially suppresses rent prices, landlords often convert rental units into condominiums or other forms of housing that are not subject to onerous restrictions. This reduces the number of available rental units for Michigan’s working families and forces newcomers into an even more competitive market — meaning even higher prices.

Additionally, rent control often benefits long-term tenants at the expense of newcomers and those needing immediate housing, effectively creating a tiered system where new residents face higher barriers to entry. It's a never-ending vicious cycle — fewer units, more competition, higher prices.

Instead of taking aim at the current price of rent, the White House and Michigan Legislature need to focus on policies that change those prices.

First, they should encourage new housing development. Streamlining permits and investing in infrastructure will create an environment conducive to construction, which would increase the supply of units, helping to stabilize rental prices naturally without the unintended consequences of price controls.

Expanding affordable housing programs and providing direct rental assistance to low-income residents would also offer immediate relief. This type of directed aid will ensure that help reaches those in need quickly and efficiently.

These solutions would create a sustainable path forward for the state’s residents and make us all better off.