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DOWDALL LAW OFFICES A PROFESSIONAL CORPORATION ATTORNEYS AT LAW City of Santa Ana August 28, 2023 Page 9 maintenance of existing ones. Economists almost universally agree that rent control creates more problems than it solves because it: (1) reduces the quantity of available housing (thereby exacerbating the existing housing shortage and affordability problem); (2) reduces the quality of available housing; (3) reduces consumer mobility and entry into the housing market; and (4) offers an inequitable solution to housing affordability issues. Rent Control Reduces the Quantity of Available Housing. Like in any other market, prices in the housing market are responsive to supply and demand. Rents and home prices tend to increase in the short-term when demand outstrips supply. Over time, however, higher rents encourage new investment in rental housing, which yields "new construction, rehabilitation of existing units, and conversion of buildings from nonresidential to residential use," and contributes to eliminating the housing shortage.' Artificially capping rents sends a false message that no such investment is necessary, thereby reducing rather than expanding the housing supply.' Because it reduces the profitability of rental housing, rent control "direct[s] investment capital out of the rental market and into other more profitable markets."' This results not only in a decline of construction of new housing, but existing rental units are often converted to other uses.10 In short, rent control "perpetuates the very problem it was ' Vai Werness, Rent Controls: /I White Paper Report 94, National Association of Realtors (Mar. 2017), https://realtorparty.realtor/wp-content/uploads/2017/12/State-Local- Issues-Rent-Control-White-Paper.pdf. $ Id. 9 National Multifamily Housing Council, The High Cost of Rent Control, https: www.nmhc.org/news/articles/the-high-cost-of-rent-control/. 10 Id.