What John Oliver Gets Wrong About Rising Rents

High housing costs are no laughing matter, as John Oliver’s latest monologue confirms.

On Sunday, the comedian devoted a 22-minute segment of his HBO show Last Week Tonight to the issue of rising rents and all the attendant problems of housing unaffordability and instability that those can cause.

“Rents are skyrocketing, and that is the last thing you want to hear is on the rise, along with COVID cases, murder rates, and Henry Kissinger’s life expectancy,” quipped Oliver. “You or someone you know may be struggling to find a place right now or being priced out of where you currently live by your landlord.”

Rising rents are a very real phenomenon driven by a mismatch in many cities between the number of homes that are being built and the number of people who would like to live in them. The wedge between supply and demand is created by cities’ elaborate zoning codes, price regulations, and permitting processes that all combine to reduce housing availability and raise prices.

It should be no surprise that rents are high when a majority of land in major cities is off-limits to new development, it takes years to approve whatever new housing is allowed, and some of those new units have to be given away at below-market rates.

The details of these restrictions are a wonky topic, to be sure. One expects only so much depth or insight from a comedic explanation of it all. But even allowing for that handicap, Oliver’s treatment of the housing supply issue proves to be superficial, brief, and confused.

Oliver either misunderstands or fails to explore the link between government regulation, housing supply, and housing market outcomes. His perfunctory explanation of it serves only as a brief prelude to his attack on the real villains in his story: greedy private landlords with carte blanche to raise rents and evict tenants.

The solutions he puts forward, therefore, have little to do with eliminating needless, harmful regulatory barriers to new supply. Instead, he calls for legally constraining landlords’ ability to raise rents and evict tenants and declaring housing a federally funded, government-provided right.

Oliver starts off his segment well enough.

“You’ll often hear that high rents are a supply and demand issue; basically: too many renters, not enough units. And that is partially true because there are not nearly enough affordable units in the U.S,” he says.

Things go downhill fast, however, as Oliver adds that the supply narrative is “a little weird because… you probably see new buildings cropping up all the time.”

“Apartments are being built, but the problem is, thanks in part to local NIMBY opposition to more affordable multifamily housing, it’s mainly been at the high-end,” he says. “This serious lack of affordable housing has enabled landlords to charge higher rents for the units that exist.”

The above statement demonstrates an easy-to-make but very serious misunderstanding of how housing markets work.

A lack of affordable housing doesn’t enable landlords to charge higher rents on existing units. Rather, a lack of housing per se allows landlords to charge higher rates for the units that exist, which makes them unaffordable.

The corollary is that building new