New research on rent control confirms negative economic, social impacts

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Rent control policies are laws that cap rents and are usually implemented with the stated purpose of improving housing affordability. In fact, they may do just the opposite, according to an in-depth review of academic research on the issue conducted by Dr. Lisa Sturtevant.

Among the conclusions Dr. Sturtevant’s review found 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;
  • Rent control and rent stabilization policies do a poor job at targeting benefits;
  • Rent control can cause renters to continue to live in units that are too small, too large or not in the right locations to best meet their housing needs;
  • There are significant fiscal costs associated with implementing a rent control program;
  • Rent-controlled buildings can potentially suffer from deterioration or lack of investment; and,
  • Rent control policies can hold rents of controlled units at lower levels but not under all circumstances.

Dr. Sturtevant’s literature review 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.

NMHC stands ready to help solve the affordability crisis that communities across the nation are facing. However, an overly cumbersome regulatory system, rising land and construction costs, neighborhood opposition to new housing, often prevent us 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 literature review can be found here.