Is Eviction Moratorium Driving Up Rents?
GlobeSt.com has an interesting article that addresses the question of whether or not the eviction moratorium is driving up rents and it ends up the answer is a bit complicated. From the article:
Like pricing for almost anything else, setting rents comes down to Econ 101: supply and demand. When demand tops supply, price increases. We’ve seen this of late with lumber, food and even automobiles (among other items) – hence the talk of inflation.
Regardless of your view on the policy issue, eviction bans indisputably limit available supply. Units that would otherwise go vacant are not becoming available. Less supply in a period of high demand (as we see in 2021) drives up prices. But to what degree?
The number of units impacted is likely much smaller than headlines suggest, but even a small number can have a big impact. Remember that rental housing vacancy runs in a tight band, almost always in the single-digits, even in the worst of times. Apartment vacancy got as high as 7.8% in 2009 and tightened to a record low of 3.1% in July 2021. That’s a range of less than 5 percentage points. So even if the eviction bans impacted vacancy by just 1 percentage point, that’s a big deal.