9 ms·

Is there a clear consensus that this is the case? I had much the same understanding as you after reading all the debates on rent control on HN, but was recently

Is there a clear consensus that this is the case? I had much the same understanding as you after reading all the debates on rent control on HN, but was recently pointed to [1] which offers a very contrarian perspective (including an analysis of a study done on rent control in SF). As a non-economist, it feels like this topic deserves a great deal more empirical study so we're not stuck arguing with anecdotes and hypotheticals. [1] https://jwmason.org/slackwire/considerations-on-rent-control/ https://jwmason.org/slackwire/considerations-on-rent-control...

Causality1 5y ago
His sources clearly say that rent control reduces the supply of rental housing as well as making people rent smaller and smaller units. I would posit, however, that it isn't rent control having a major effect on housing supply but rather regulations on new housing. Zoning difficulties, permit difficulties, requirements to accommodate personal vehicles, etc.
- anonuser123456 5y ago
  New housing tends to be upscale, thus more expensive. The well to do move from cheaper to more expensive housing on average. This frees up cheaper units for the less well to do. Caps on rent prices reduce the incentive to build high end housing where the margin would be higher, but rent caps limit this, so less gets built overall.
  - eru 5y ago
    > This frees up cheaper units for the less well to do. For people who want to learn more: this process is called 'filtering'. See eg https://www.planetizen.com/blogs/100293-how-filtering-increases-housing-affordability https://www.planetizen.com/blogs/100293-how-filtering-increa... > New housing tends to be upscale, thus more expensive. Yes, and that's also the mechanism for how we got nicer and nicer houses over the centuries.
dasil003 5y ago
That article raises a lot of good points, and I agree San Francisco's housing problem is more with zoning than rent control, but there's definitely some spin and assumptions. The idea that rent control doesn't reduce available housing stock sounds true enough in the sense that people enjoying rent controls are less likely to move, and they count just as much as a new resident that might have displaced them, but from the perspective of the new resident the available supply is definitely suppressed and thus the price forced up for all non-rent-controlled apartments. The other one is the unequivocal statement that long-term tenancy is better for the fabric of a neighborhood. In principal I agree with that, but I've known a lot of people in SF that would like to move but can't simply because they are priced out of the current market rate rentals. In these cases, it's not clear whether the benefit of having a controlled rent is worth the inability to move, especially if overall market rates could still be within reach sans rent control.
- sudosysgen 5y ago
  The solution to this is to tweak rent control. For example, introducing sticky prices and incentivizing leases to end in the same week can do wonders to help people move affordably. I don't see that from the perspective of a new resident it must necessarily be worse with than without rent control. The scenario that would make the difference in overall supply would be if the old resident had to move out against their will, and obviously that's what we're trying to avoid. You really do have to incentivize some construction, though. Getting the ball rolling by buying some unzoned land and building good quality public housing on it can also be good.
  - eru 5y ago
    No need for the public housing: the hard part is to get anyone (public or private) permission to build. The building is relatively easy business.
    - sudosysgen 5y ago
      That may very well be the case. That being said, some promoters may decide to neglect some classes of housing or hold out for more profitable ventures even when you fix zoning. So public housing may or may not be needed still, that's going to depend on what happens.
standardUser 5y ago
In addition to needing a better ratio of data to assumptions, the conversation on rent stabilization needs to accept that all laws on not created equally. While it may be easy to show that extremely aggressive rent control measures in hyper-competitive markets can cause problems, there are a lot of alternative approaches that allows for the influence of market forces and provide a sense of stability to working families that are deeply invested in the communities they live in.
gruez 5y ago
According to this survey of economists, the consensus seems to be "rent control is bad". https://www.igmchicago.org/surveys/rent-control/ https://www.igmchicago.org/surveys/rent-control/
- stuaxo 5y ago
  Am I cynical to assume "igmchicago" follows the Chicago school of economics and thus to assume a certain take on things ?
- deleted 5y ago
  [deleted]
- Ericson2314 5y ago
  Maybe read https://jwmason.org/slackwire/considerations-on-rent-control/ https://jwmason.org/slackwire/considerations-on-rent-control... a bit, basically history is repeating itself with the economic consensus on the minimum wage. Also see this comment https://jwmason.org/slackwire/considerations-on-rent-control/#comment-13300 https://jwmason.org/slackwire/considerations-on-rent-control... and the author's response. One can argue that it's less that the theory is "wrong" but that that the theory doesn't match reality: the housing and employment markets are deeply flawed in hard-to-fix ways. Maybe we want to fix these markets, but if we want to intervene at that scale, we might as well be open to other non-market strategies at managing those resources too. In the mean time, rent control is "easy" with empirically demonstrated benefits.
  - JamesBarney 5y ago
    All the papers jw mason quotes say the theory matches reality. Basically that rent controls strong enough to make a difference reduce housing quantity and quality.
    - Ericson2314 5y ago
      Well, these are better models fine-tuned to the actual situation. That's great I was referring to the the econ-101-style reasoning that the mainstream has used when engaging with public to say the minimum wage or rent control is bad.
deleted 5y ago
[deleted]
totetsu 5y ago
But the "I knew a guy once who did the thing" type of evidence is most salient in most peoples opinions about things
AnthonyMouse 5y ago
This article doesn't start off well: > Among economists, rent regulation seems be in similar situation as the minimum wage was 20 years ago. At that time, most economists took it for granted that raising the minimum wage would reduce employment. Textbooks said that it was simple supply and demand — if you raise the price of something, people will buy less of it. But as more state and local governments raised minimum wages, it turned out to be very hard to find any negative effect on employment. The reason it's hard is that they're not doing controlled experiments. They're not starting in a place with no minimum wage and instituting a significant one. They're starting in a place that already has a minimum wage and enacting a minor increase in the amount. The existing minimum wage would have already done most of the damage you're trying to measure, but you're folding that into the baseline and ignoring it. All you get is the amount from the increase, which for a modest increase may not rise to the level of statistical significance. Meanwhile they have biased data, because the state legislatures, if they have any sense of self-preservation, aren't going to enact a minimum wage large enough to damage the local economy. So you have selection bias in the sample, and even at the raised amount, only a low single digit percentage of people are making the minimum wage. These all make it hard to measure any macro-scale effect because you're making a change to a fraction of a fraction of a fraction of the economy. But he goes from that to a conclusory assumption: > Today, it is clear that minimum wages do not reduce employment. Which is facially ridiculous as an absolute declaration. No one can seriously claim that raising minimum wage to a million dollars an hour wouldn't severely reduce employment. This is a bad sign, and it only continues from there: > They also found that eliminating rent control also raised rents in homes in the same area that were never subject to the controls, reinforcing the idea that rent control contributes to neighborhood stability. Plausibly because landlords have little incentive to make improvements to rent controlled properties, which then decompose and negatively impact the quality of the neighborhood, and removing rent control removes that perverse incentive. It's like arguing that maintaining a tire fire on every street corner would reduce rents in the area. Possibly true; still a terrible idea. Notably this also implies restrictions on new construction, because higher prices should make new construction profitable until prices fall back to the level where it isn't, absent some (e.g. regulatory) constraints. > The main conclusions from this literature are, first, that rent regulation is effective in limiting rent increases This is kind of ridiculous. Yes, a law against rent increases will prevent rent increases, by law. The question is, at what cost? And what are the alternatives (e.g. policies to increase housing supply) to achieve the same result without it? > The absence of rent regulation may also create political obstacles to efforts to increase housing supply, attract new employers, or otherwise improve urban areas, since current residents correctly perceive that the result of any improvement may be higher rents and displacement. Wait, so people will create obstacles to efforts to increase the housing supply (which should reduce rents) because "current residents correctly perceive" that the result is higher rents? Meanwhile rent control causes non-improvement of urban areas, because landlords lack the incentive to make improvements if the improvements can't yield higher returns. There is an obvious contradiction between wanting improvements and not wanting the improvements to increase housing costs, which, all else equal, they would. The way to square the circle is to increase housing supply, so that quality can increase without higher demand bidding up the price of a finite supply. So this is where we come to the crux of it: > Fourth, in many high-cost areas, housing supply is relatively fixed. The reason that existing homes in many large cities cost multiple times more than the costs of construction, is that the ability to add new housing in these areas is very limited, by some mix of regulatory barriers like zoning, and physical or economic barriers. In economists’ terms, the supply of housing in these areas is inelastic – it doesn’t respond very much to changes in price. The conclusion that rent control will do something good is based on the assumption of inelastic housing supply due to regulatory barriers. But that's the real problem that has to be solved, and fixing that relegates rent control back to the dustbin where we found it.
dataflow 5y ago
Another link on the topic suggesting rent control backfires in the long term: https://www.brookings.edu/research/what-does-economic-evidence-tell-us-about-the-effects-of-rent-control/ https://www.brookings.edu/research/what-does-economic-eviden...
JamesBarney 5y ago
The evidence on increasing minimum wage is mixed. With half finding no effect, and half finding a small negative effect. But one side has a very clear concise mechanism and the other is kind of handwavy. And almost all economists believe increasing minimum wage will decrease employment, the question is how much and how do you weight this decrease in employment against increase take home pay. JW Mason's blog he quotes a lot of studies to "support" his post but here is a list of the studies he quotes. What you'll find are all the ones that even address the question find "rent control decreases rental housing, decreases rental quality, definitely decreases rent in the short term (maybe increases maybe decreases long term), and increases tenant lifespan". These are all the same things an econ 101 class would tell you. He's definitely using these studies for support and not illumination. Here's a list of all the papers he quoted and what they said. 2007 study by David Sims The sudden end of rent control in Massachusetts in 1995 provides a natural experiment to study the effects of rent control. My results indicate that the intuition presented in simple microeconomic models is correct. Rent control decreases the quantity of rental units supplied, as well as rent and unit maintenance. It also lengthens renter stays. In addition, some evidence suggests that rent control produces small spillover effects that decrease the rent of uncontrolled units in controlled areas 2014 study by Autor, Palmer, and Pathak Doesn't really look at his question at all. We measure the capitalization of housing market externalities into residential housing values by studying the unanticipated elimination of stringent rent controls in Cambridge, Massachusetts, in 1995. Pooling data on the universe of assessed values and transacted prices of Cambridge residential properties between 1988 and 2005, we find that rent decontrol generated substantial, robust price appreciation at decontrolled units and nearby never-controlled units, accounting for a quarter of the $7.8 billion in Cambridge residential property appreciation during this period. The majority of this contribution stems from induced appreciation of never-controlled properties. Residential investment explains only a small fraction of the total 2007 study by Gilderbloom and Ye In general, conventional generalizations about rent control do not distinguish between moderate and restrictive controls in the housing market. There has been a great deal of change in the last few decades as rent controls have moved from being restrictive to more moderate forms. This article examined a moderate form of rent control, looking at 76 regulated cities in New Jersey. Moderate rent control in New Jersey stands as symbolic rather than distributional reform. Our research suggests that the pressure of real estate groups, government, and the courts has made modern-day rent control laws toothless in terms of their impact on rents. A similar finding has been found in southern California (Heskin et al., 2000). About the only measurable impact is that landlords may have cleverly reduced the size of rental units to create more units and profit in rent control cities. At best, it appears that most rent control ordinances have only succeeded in preventing rent increases that are excessive. These ordinances have also provided protection against arbitrary evictions, incentives for maintenance of rentals, and knowledge to tenants about the level of rent increases to expect in the future. Certainly, this is a small improvement for tenants who have had none of these protections in the unfettered market. Our study shows that, as a moderate type of rent control, the rent regulations in New Jersey may have avoided some of the negativity of the conventional regulations 2015 study by Ambrosius, Glderbloom and coauthors This study replicates, using 2010 Census data, and extends past work on moderately rent-controlled municipalities in New Jersey, which began policies to stabilize rents while allowing landlords modest returns in the 1970s. Our approach compares controlled and non-controlled communities over 10,000 persons; and regresses rental housing characteristics (rent and quality/quantity) on two measures of rent control: nominal (1/0) and ordinal (an index of policy diversity/strength). Because the decade 2000–2010 was unique due to the housing bubble and recession, we expand previous analyses by introducing two additional dependent variables: changes in property values, which may be affected by restrictions on rents; and foreclosure rates, a problem affecting investors and a proxy for abandonment. We find that these 40-year-old policies do not exert any statistically-significant effects on their communities’ housing markets once other factors are controlled—a finding which has implications for affordable housing and advocacy in New Jersey and beyond. Diamond McQuade, and Qian in 2018 Using a 1994 law change, we exploit quasi-experimental variation in the assignment of rent control in San Francisco to study its impacts on tenants and landlords. Leveraging new data tracking individuals' migration, we nd rent control limits renters' mobility by 20% and lowers displacement from San Francisco. Landlords treated by rent control reduce rental housing supplies by 15% by selling to owner-occupants and redeveloping buildings. Thus, while rent control prevents displacement of incumbent renters in the short run, the lost rental housing supply likely drove up market rents in the long run, ultimately undermining the goals of the law.
MeinBlutIstBlau 5y ago
In berlin you apply for housing like online dating in the US...as an ugly male looking for a 10 woman. It's that atrocious. Like you need flawless credit, long history, and can front some serious cash and be the first through the door. Otherwise good luck. Might as well just start brushing up on your polish and move to krakow. It'd save you some time.
sampo 5y ago
> Is there a clear consensus that this is the case? There is a consensus in economics, that rent control is bad idea. Inasmuch as economics can be considered a science, supporting rent control is an anti-science position. https://en.wikipedia.org/wiki/Rent_regulation https://en.wikipedia.org/wiki/Rent_regulation https://freakonomics.com/podcast/rent-control/ https://freakonomics.com/podcast/rent-control/ https://www.econlib.org/library/Enc/RentControl.html https://www.econlib.org/library/Enc/RentControl.html https://www.economist.com/leaders/2019/09/19/rent-control-will-make-housing-shortages-worse https://www.economist.com/leaders/2019/09/19/rent-control-wi...
- tgaj 5y ago
  Economics is note really a science.
- chalst 5y ago
  You have linked to no scholarly papers, and the Wikipedia article seems to carefully avoid stating there is the consensus you claim. Are you aware that there is no consensus in economics that rents are determined by the interaction between a determinate upwards-sloping supply curve, representing landlord's willingness to so many units at any given price, and a likewise downwards-sloping demand curve for renter's disposition? Many of the just-so stories about Econ 101 assume this is so.
  - sampo 5y ago
    > Wikipedia article seems to carefully avoid stating there is the consensus you claim. Ctrl+f consensus, and you find: "There is a consensus among economists that rent control reduces the quality and quantity of rental housing units."
    - chalst 5y ago
      Found it - that's remarkably lame: an assertion that there is a consensus, "backed up" by a reference saying to see the "Economists views" section for references, which is a broken internal link. No problem, I edit Wikipedia and SOFIXIT applies. Since many economists have woken up to the failure of the "price determined by intersection of buyer-demand and seller-supply curves" thesis following the spectacular failure of this fitting the facts in the case of the minimal wage as documented by Krueger and Card in the 80s, there is today no such consensus.
conanbatt 5y ago
> They, may, however, reduce the supply of rental housing if it is easy for landlords to convert apartments to condominiums or other non-rental uses. This suggests that limitations on these kinds of conversions may be worth exploring Classic central planning thinking. This would work as long as we ban the agents from doing otherwise.

Causality1 5y ago

His sources clearly say that rent control reduces the supply of rental housing as well as making people rent smaller and smaller units. I would posit, however, that it isn't rent control having a major effect on housing supply but rather regulations on new housing. Zoning difficulties, permit difficulties, requirements to accommodate personal vehicles, etc.

anonuser123456 5y ago
New housing tends to be upscale, thus more expensive. The well to do move from cheaper to more expensive housing on average. This frees up cheaper units for the less well to do. Caps on rent prices reduce the incentive to build high end housing where the margin would be higher, but rent caps limit this, so less gets built overall.
- eru 5y ago
  > This frees up cheaper units for the less well to do. For people who want to learn more: this process is called 'filtering'. See eg https://www.planetizen.com/blogs/100293-how-filtering-increases-housing-affordability https://www.planetizen.com/blogs/100293-how-filtering-increa... > New housing tends to be upscale, thus more expensive. Yes, and that's also the mechanism for how we got nicer and nicer houses over the centuries.

dasil003 5y ago

That article raises a lot of good points, and I agree San Francisco's housing problem is more with zoning than rent control, but there's definitely some spin and assumptions. The idea that rent control doesn't reduce available housing stock sounds true enough in the sense that people enjoying rent controls are less likely to move, and they count just as much as a new resident that might have displaced them, but from the perspective of the new resident the available supply is definitely suppressed and thus the price forced up for all non-rent-controlled apartments. The other one is the unequivocal statement that long-term tenancy is better for the fabric of a neighborhood. In principal I agree with that, but I've known a lot of people in SF that would like to move but can't simply because they are priced out of the current market rate rentals. In these cases, it's not clear whether the benefit of having a controlled rent is worth the inability to move, especially if overall market rates could still be within reach sans rent control.

sudosysgen 5y ago
The solution to this is to tweak rent control. For example, introducing sticky prices and incentivizing leases to end in the same week can do wonders to help people move affordably. I don't see that from the perspective of a new resident it must necessarily be worse with than without rent control. The scenario that would make the difference in overall supply would be if the old resident had to move out against their will, and obviously that's what we're trying to avoid. You really do have to incentivize some construction, though. Getting the ball rolling by buying some unzoned land and building good quality public housing on it can also be good.
- eru 5y ago
  No need for the public housing: the hard part is to get anyone (public or private) permission to build. The building is relatively easy business.
  - sudosysgen 5y ago
    That may very well be the case. That being said, some promoters may decide to neglect some classes of housing or hold out for more profitable ventures even when you fix zoning. So public housing may or may not be needed still, that's going to depend on what happens.

standardUser 5y ago

In addition to needing a better ratio of data to assumptions, the conversation on rent stabilization needs to accept that all laws on not created equally. While it may be easy to show that extremely aggressive rent control measures in hyper-competitive markets can cause problems, there are a lot of alternative approaches that allows for the influence of market forces and provide a sense of stability to working families that are deeply invested in the communities they live in.

gruez 5y ago

According to this survey of economists, the consensus seems to be "rent control is bad". https://www.igmchicago.org/surveys/rent-control/ https://www.igmchicago.org/surveys/rent-control/

stuaxo 5y ago
Am I cynical to assume "igmchicago" follows the Chicago school of economics and thus to assume a certain take on things ?
deleted 5y ago
[deleted]
Ericson2314 5y ago
Maybe read https://jwmason.org/slackwire/considerations-on-rent-control/ https://jwmason.org/slackwire/considerations-on-rent-control... a bit, basically history is repeating itself with the economic consensus on the minimum wage. Also see this comment https://jwmason.org/slackwire/considerations-on-rent-control/#comment-13300 https://jwmason.org/slackwire/considerations-on-rent-control... and the author's response. One can argue that it's less that the theory is "wrong" but that that the theory doesn't match reality: the housing and employment markets are deeply flawed in hard-to-fix ways. Maybe we want to fix these markets, but if we want to intervene at that scale, we might as well be open to other non-market strategies at managing those resources too. In the mean time, rent control is "easy" with empirically demonstrated benefits.
- JamesBarney 5y ago
  All the papers jw mason quotes say the theory matches reality. Basically that rent controls strong enough to make a difference reduce housing quantity and quality.
  - Ericson2314 5y ago
    Well, these are better models fine-tuned to the actual situation. That's great I was referring to the the econ-101-style reasoning that the mainstream has used when engaging with public to say the minimum wage or rent control is bad.

deleted 5y ago

[deleted]

totetsu 5y ago

But the "I knew a guy once who did the thing" type of evidence is most salient in most peoples opinions about things

AnthonyMouse 5y ago

This article doesn't start off well: > Among economists, rent regulation seems be in similar situation as the minimum wage was 20 years ago. At that time, most economists took it for granted that raising the minimum wage would reduce employment. Textbooks said that it was simple supply and demand — if you raise the price of something, people will buy less of it. But as more state and local governments raised minimum wages, it turned out to be very hard to find any negative effect on employment. The reason it's hard is that they're not doing controlled experiments. They're not starting in a place with no minimum wage and instituting a significant one. They're starting in a place that already has a minimum wage and enacting a minor increase in the amount. The existing minimum wage would have already done most of the damage you're trying to measure, but you're folding that into the baseline and ignoring it. All you get is the amount from the increase, which for a modest increase may not rise to the level of statistical significance. Meanwhile they have biased data, because the state legislatures, if they have any sense of self-preservation, aren't going to enact a minimum wage large enough to damage the local economy. So you have selection bias in the sample, and even at the raised amount, only a low single digit percentage of people are making the minimum wage. These all make it hard to measure any macro-scale effect because you're making a change to a fraction of a fraction of a fraction of the economy. But he goes from that to a conclusory assumption: > Today, it is clear that minimum wages do not reduce employment. Which is facially ridiculous as an absolute declaration. No one can seriously claim that raising minimum wage to a million dollars an hour wouldn't severely reduce employment. This is a bad sign, and it only continues from there: > They also found that eliminating rent control also raised rents in homes in the same area that were never subject to the controls, reinforcing the idea that rent control contributes to neighborhood stability. Plausibly because landlords have little incentive to make improvements to rent controlled properties, which then decompose and negatively impact the quality of the neighborhood, and removing rent control removes that perverse incentive. It's like arguing that maintaining a tire fire on every street corner would reduce rents in the area. Possibly true; still a terrible idea. Notably this also implies restrictions on new construction, because higher prices should make new construction profitable until prices fall back to the level where it isn't, absent some (e.g. regulatory) constraints. > The main conclusions from this literature are, first, that rent regulation is effective in limiting rent increases This is kind of ridiculous. Yes, a law against rent increases will prevent rent increases, by law. The question is, at what cost? And what are the alternatives (e.g. policies to increase housing supply) to achieve the same result without it? > The absence of rent regulation may also create political obstacles to efforts to increase housing supply, attract new employers, or otherwise improve urban areas, since current residents correctly perceive that the result of any improvement may be higher rents and displacement. Wait, so people will create obstacles to efforts to increase the housing supply (which should reduce rents) because "current residents correctly perceive" that the result is higher rents? Meanwhile rent control causes non-improvement of urban areas, because landlords lack the incentive to make improvements if the improvements can't yield higher returns. There is an obvious contradiction between wanting improvements and not wanting the improvements to increase housing costs, which, all else equal, they would. The way to square the circle is to increase housing supply, so that quality can increase without higher demand bidding up the price of a finite supply. So this is where we come to the crux of it: > Fourth, in many high-cost areas, housing supply is relatively fixed. The reason that existing homes in many large cities cost multiple times more than the costs of construction, is that the ability to add new housing in these areas is very limited, by some mix of regulatory barriers like zoning, and physical or economic barriers. In economists’ terms, the supply of housing in these areas is inelastic – it doesn’t respond very much to changes in price. The conclusion that rent control will do something good is based on the assumption of inelastic housing supply due to regulatory barriers. But that's the real problem that has to be solved, and fixing that relegates rent control back to the dustbin where we found it.

dataflow 5y ago

Another link on the topic suggesting rent control backfires in the long term: https://www.brookings.edu/research/what-does-economic-evidence-tell-us-about-the-effects-of-rent-control/ https://www.brookings.edu/research/what-does-economic-eviden...

JamesBarney 5y ago

The evidence on increasing minimum wage is mixed. With half finding no effect, and half finding a small negative effect. But one side has a very clear concise mechanism and the other is kind of handwavy. And almost all economists believe increasing minimum wage will decrease employment, the question is how much and how do you weight this decrease in employment against increase take home pay. JW Mason's blog he quotes a lot of studies to "support" his post but here is a list of the studies he quotes. What you'll find are all the ones that even address the question find "rent control decreases rental housing, decreases rental quality, definitely decreases rent in the short term (maybe increases maybe decreases long term), and increases tenant lifespan". These are all the same things an econ 101 class would tell you. He's definitely using these studies for support and not illumination. Here's a list of all the papers he quoted and what they said. 2007 study by David Sims The sudden end of rent control in Massachusetts in 1995 provides a natural experiment to study the effects of rent control. My results indicate that the intuition presented in simple microeconomic models is correct. Rent control decreases the quantity of rental units supplied, as well as rent and unit maintenance. It also lengthens renter stays. In addition, some evidence suggests that rent control produces small spillover effects that decrease the rent of uncontrolled units in controlled areas 2014 study by Autor, Palmer, and Pathak Doesn't really look at his question at all. We measure the capitalization of housing market externalities into residential housing values by studying the unanticipated elimination of stringent rent controls in Cambridge, Massachusetts, in 1995. Pooling data on the universe of assessed values and transacted prices of Cambridge residential properties between 1988 and 2005, we find that rent decontrol generated substantial, robust price appreciation at decontrolled units and nearby never-controlled units, accounting for a quarter of the $7.8 billion in Cambridge residential property appreciation during this period. The majority of this contribution stems from induced appreciation of never-controlled properties. Residential investment explains only a small fraction of the total 2007 study by Gilderbloom and Ye In general, conventional generalizations about rent control do not distinguish between moderate and restrictive controls in the housing market. There has been a great deal of change in the last few decades as rent controls have moved from being restrictive to more moderate forms. This article examined a moderate form of rent control, looking at 76 regulated cities in New Jersey. Moderate rent control in New Jersey stands as symbolic rather than distributional reform. Our research suggests that the pressure of real estate groups, government, and the courts has made modern-day rent control laws toothless in terms of their impact on rents. A similar finding has been found in southern California (Heskin et al., 2000). About the only measurable impact is that landlords may have cleverly reduced the size of rental units to create more units and profit in rent control cities. At best, it appears that most rent control ordinances have only succeeded in preventing rent increases that are excessive. These ordinances have also provided protection against arbitrary evictions, incentives for maintenance of rentals, and knowledge to tenants about the level of rent increases to expect in the future. Certainly, this is a small improvement for tenants who have had none of these protections in the unfettered market. Our study shows that, as a moderate type of rent control, the rent regulations in New Jersey may have avoided some of the negativity of the conventional regulations 2015 study by Ambrosius, Glderbloom and coauthors This study replicates, using 2010 Census data, and extends past work on moderately rent-controlled municipalities in New Jersey, which began policies to stabilize rents while allowing landlords modest returns in the 1970s. Our approach compares controlled and non-controlled communities over 10,000 persons; and regresses rental housing characteristics (rent and quality/quantity) on two measures of rent control: nominal (1/0) and ordinal (an index of policy diversity/strength). Because the decade 2000–2010 was unique due to the housing bubble and recession, we expand previous analyses by introducing two additional dependent variables: changes in property values, which may be affected by restrictions on rents; and foreclosure rates, a problem affecting investors and a proxy for abandonment. We find that these 40-year-old policies do not exert any statistically-significant effects on their communities’ housing markets once other factors are controlled—a finding which has implications for affordable housing and advocacy in New Jersey and beyond. Diamond McQuade, and Qian in 2018 Using a 1994 law change, we exploit quasi-experimental variation in the assignment of rent control in San Francisco to study its impacts on tenants and landlords. Leveraging new data tracking individuals' migration, we nd rent control limits renters' mobility by 20% and lowers displacement from San Francisco. Landlords treated by rent control reduce rental housing supplies by 15% by selling to owner-occupants and redeveloping buildings. Thus, while rent control prevents displacement of incumbent renters in the short run, the lost rental housing supply likely drove up market rents in the long run, ultimately undermining the goals of the law.

MeinBlutIstBlau 5y ago

In berlin you apply for housing like online dating in the US...as an ugly male looking for a 10 woman. It's that atrocious. Like you need flawless credit, long history, and can front some serious cash and be the first through the door. Otherwise good luck. Might as well just start brushing up on your polish and move to krakow. It'd save you some time.

sampo 5y ago

> Is there a clear consensus that this is the case? There is a consensus in economics, that rent control is bad idea. Inasmuch as economics can be considered a science, supporting rent control is an anti-science position. https://en.wikipedia.org/wiki/Rent_regulation https://en.wikipedia.org/wiki/Rent_regulation https://freakonomics.com/podcast/rent-control/ https://freakonomics.com/podcast/rent-control/ https://www.econlib.org/library/Enc/RentControl.html https://www.econlib.org/library/Enc/RentControl.html https://www.economist.com/leaders/2019/09/19/rent-control-will-make-housing-shortages-worse https://www.economist.com/leaders/2019/09/19/rent-control-wi...

tgaj 5y ago
Economics is note really a science.
chalst 5y ago
You have linked to no scholarly papers, and the Wikipedia article seems to carefully avoid stating there is the consensus you claim. Are you aware that there is no consensus in economics that rents are determined by the interaction between a determinate upwards-sloping supply curve, representing landlord's willingness to so many units at any given price, and a likewise downwards-sloping demand curve for renter's disposition? Many of the just-so stories about Econ 101 assume this is so.
- sampo 5y ago
  > Wikipedia article seems to carefully avoid stating there is the consensus you claim. Ctrl+f consensus, and you find: "There is a consensus among economists that rent control reduces the quality and quantity of rental housing units."
  - chalst 5y ago
    Found it - that's remarkably lame: an assertion that there is a consensus, "backed up" by a reference saying to see the "Economists views" section for references, which is a broken internal link. No problem, I edit Wikipedia and SOFIXIT applies. Since many economists have woken up to the failure of the "price determined by intersection of buyer-demand and seller-supply curves" thesis following the spectacular failure of this fitting the facts in the case of the minimal wage as documented by Krueger and Card in the 80s, there is today no such consensus.

conanbatt 5y ago

> They, may, however, reduce the supply of rental housing if it is easy for landlords to convert apartments to condominiums or other non-rental uses. This suggests that limitations on these kinds of conversions may be worth exploring Classic central planning thinking. This would work as long as we ban the agents from doing otherwise.