You may have noticed eggs are expensive. Even if you don’t eat or buy eggs, you would know about the egg crisis because of the unending buzz on TV, in newspapers, and on social media. Headline after headline after headline. The Cincinnati Enquirer called it a “perfect storm” of avian flu wiping out huge flocks, pandemic shortages barely recovering, higher transportation costs, and all of it coming together as a big jump in prices.  A jump from $1.93 per dozen to $4.25 — a 220% increase!  The U.S. is experiencing an egg shortage: not enough chickens to produce enough eggs to meet demand.  People do understand how inflation works; it happens when supply doesn’t keep up with demand. When it comes to housing prices, however, that understanding fades and is replaced with panic. 

The egg shortage and higher prices are annoying, but the explanation makes sense to almost everyone. People get that egg prices will flatten and fall as farmers restock their flocks. Short supplies result in higher prices. 

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But has anyone called for a price cap on eggs?  Egg stabilization?  Politicians railing against the greedy chicken farmer, taking advantage of the hardworking egg consumer?  Should out-of-town egg investors and sellers be banned from grocery stores because they are bad for local chickens?  Of course not.

But substitute “housing” for “eggs,” and you have entered the bizarre world of politicians talking about housing.

Sen. Elizabeth Warren (D-MA) wrote a long letter to President Joe Biden late last year calling for a number of federal interventions in the rental housing market. The White House complied, issuing a series of interventions, including investigations by the Federal Trade Commission and the Consumer Financial Protection Bureau into “unfair practices” in the rental housing market.    

There is no shortage of headlines about rising rents and political leaders railing against greed.  During the pandemic, rents fell. Then, as COVID began to unwind, rents rose back to where they had been before. Now they are flattening and likely to fall significantly in 2023.  A decade of under-production, pandemic economic hardship, slow rent relief that failed to make housing providers whole, and a surge of demand from a growing population base all led to housing shortages and higher prices.  

Instead of seeing this, accepting it, dealing with it, and trying to support efforts to create more housing, there has been collective panic and knee-jerk, emotional reactions that lead to catchy headlines and incredibly damaging policy.  What’s needed is not federal investigations of “greed,” but efforts to streamline permitting and local rules that choke housing supply when demand rises, causing prices to rise in turn. 

Housing providers in Ohio are currently offering applicants lower deposits, a free month's rent, gym memberships, and even flat-screen televisions for signing a lease. Why? Because in 2023, housing providers are seeing vacancies rise, and they worry about keeping paying residents. It’s called competition, and it also works when supply exceeds demand. This is as true for housing as it is for eggs and bacon. 

The best way to help renters is to make it easier to build housing as the economy slows. Politicians can do this by getting rid of local zoning rules that complicate housing production. That way, when demand picks up again later this year or early next, the price increases won’t be so big.

People understand how supply and demand works with eggs. If the media and politicians applied the same logic to housing, we’d get better policies rather than rules and investigations sure to increase risks for housing providers and limit new supply.

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Deborah Collins is a housing provider in Cincinnati and active with the Real Estate Investors of Greater Cincinnati, a trade organization supporting small housing providers. Roger Valdez is a fellow at the Foundation for Equal Opportunity, a think tank that works on improving market-oriented policies to help people that earn less money.