The Wall Street Journal has an article about the rising popularity of rent controls as a tactic to address affordable housing issues in cities across the country. Of course, this is not popular with landlords, but it’s also important to note that it is a tactic that has been shown to be ineffective:
Economists generally have a dim view of rent control, which they say restricts supply and drives up rents for tenants who don’t live in regulated buildings.
A working paper released in January by Stanford University economists found that from 1995 to 2012 rent control in San Francisco helped residents in rent-controlled apartments, increasing the likelihood that they would stay at their address by nearly 20%.
But the study also found that rent control hurt the city overall by making landlords more likely to convert their apartments to other uses and deplete the housing stock, leading to a permanent citywide rent increase of 5%.
“Tenants benefited dramatically when they were covered by rent control,” said Rebecca Diamond, an assistant professor of economics at Stanford and one of the authors of the paper. “We don’t really share it as a society.”
In other words, rent control only helps those who live in rent-controlled buildings. For everyone else, it actually drives up the cost of housing, so in the end, it results in less affordable housing, not more.