Average rents in Colorado’s largest metro area dropped substantially in the fourth quarter of last year, The Gazette reported Wednesday. It’s welcome news, of course, given the affordable-housing challenges that have frustrated much of the state in recent years.

Ironically, the positive development made headlines the same week that well-intended, economically clueless lawmakers at the state Capitol introduced a bill paving the way for rent control. House Bill 1115, advanced by the more left-leaning members of the Democrat-controlled General Assembly, would repeal a state law barring local rent-control policies.

The bill is the latest iteration of an enduring political fantasy that stubbornly resists market reality.

As noted in The Gazette’s report, Apartment Association of Metro Denver data shows average monthly rent went down $32 since the third quarter of 2022 – one of the biggest quarterly decreases in decades. It’s largely the result of new apartments finally coming onto the market amid the Denver area’s sustained building boom. Previously rising rents are leveling off and even coming down as supply expands to meet demand. It’s basic economics.

It doesn’t necessarily mean the long-superheated rental market has turned the corner yet in metro Denver, the Pikes Peak region or other population centers around the state. But it’s certainly encouraging.

Just try telling that to the backers of HB 1115, though.

Capping rent by government edict is so deceptively simple it continues to lure policy makers. It’s a magic wand for politicians who rarely stick around long enough to answer for the eventual train wreck down the line. They ignore decades of research as well as generations of bitter experience where rent control has been tried, notably New York and San Francisco.

Rent control in fact makes affordable housing less available. It raises rent for everyone who isn’t in rent-controlled housing. And if a community imposes rent control on most or all rentals, construction will grind to a halt. The rental properties that exist, meanwhile, will decay as landlords no longer can afford to keep them up.

A Stanford University study, for example, found rent control “decreases affordability, fuels gentrification and creates negative spillovers on the surrounding neighborhood.”

State law has protected Colorado from the voodoo economics of rent control since 1981. The law prevents local governments from regulating rent on housing – a prudent policy, considering there always are local governments gullible or reckless enough to try rent control.

In a statement released this week, the Colorado Apartment Association made an easy case against HB 1115’s repeal of the state law:

“Colorado’s prohibition against local governments enacting rent-control ordinances for more than 40 years is both a recognition of the damage rent control can do to available housing, and, also, an understanding that one local government’s housing policy can negatively impact neighboring communities. If Denver enacts rent control and builders decrease new housing units in Denver because of it, the cost of housing in all the surrounding municipalities will be driven up because of it. …”

In the final analysis, the only feasible way to lower rent in any market is to increase supply. Build more, in other words. Policymakers should do what they can to help make that happen.

As Cary Bruteig, the analyst who tracked the promising rental numbers for the Denver apartment association, put it: “Rents are, to a large extent, nothing more than the result of whether there’s enough units to go around.”

It’s freshman Economics 101.

Colorado Springs Gazette Editorial Board