New Research on Rent Control Confirms Negative Impacts

Rent control policies are laws that limit or cap rents and are usually implemented for the purpose of improving housing affordability.  Like many other instances where government leaders try to manipulate economic principles, these laws do just the opposite.  The National Multihousing Council (NMHC) just published an in-depth review of academic research on the issue prepared by Dr. Lisa Sturtevant.

Among the conclusions of Dr. Sturtevant’s review are that:

  • Rent control and rent stabilization laws lead to a reduction in the available supply of rental housing in a community;
  • Rent control policies generally lead to higher rents in the uncontrolled market;
  • There are significant governmental costs associated with implementing rent control programs; and
  • Rent-controlled buildings can potentially suffer from deterioration and lack of investment.

Landlord rips out walls and toilets to “fix” rent-control apartments. Washington Heights apartments. See NY Daily News, August 30, 2008.

The NMHC publication examined research published from 1972 to 2017 and includes case studies of programs in single markets, such as New York, Boston, Los Angeles, San Francisco, Santa Monica and Washington, D.C., as well as studies that take a cross-sectional approach across markets. It synthesizes the empirical research on the effects of rent control and rent stabilization on individual renters and communities, building on prior evaluations of the rent control literature.

“We understand the desire of communities dealing directly with the nation’s shortage of affordable housing to find a ‘quick fix’ like rent control, but unfortunately what looks like a ‘free’ and easy solution comes with a lot of negative, unintended consequences that actually make the situation worse,” said NMHC President Doug Bibby.

“Ultimately rent control discourages new housing production, which limits supply and raises rents for everyone else not lucky enough to secure a rent-controlled apartment. Instead of relying on a policy approach that has failed in communities across the country, lawmakers should consider options that provide more housing that is affordable to people at all price points,” he added.

Affordability is becoming a real crisis within major communities across the nation. However, an overly cumbersome regulatory system, rising land and construction costs, neighborhood opposition to new housing, often prevent multihousing developers from building the housing the nation needs.  Instead of looking to failed policies like rent control, public and private stakeholders need to come together to find ways to both build more housing and reduce housing costs.

The research paper can be found here.

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