4 ms·

For those who just want a summary, the conclusion is... it's complicated. From the paper: "Rent controls appear to be quite effective in terms of slowing the g

For those who just want a summary, the conclusion is... it's complicated. From the paper: "Rent controls appear to be quite effective in terms of slowing the growth of rents paid for dwellings subject to control. However, this policy also leads to a wide range of adverse effects affecting the whole society." So you get the first order effect you wanted "rent stays low in the area" but you get all kinds of adverse second order effects (higher rents outside controlled areas, poorer maintenance, lower new construction rates, etc.)

dmix 2y ago
That's the reason it keeps being tried. The side effects are wide, disparate, and over long timelines so it's easy to obscure the net negatives to the public. That plus "If construction rates decline that's the next generations problem. All I want is lower rent now". Which is an effective political gambit.
soramimo 2y ago
My mental model of rent control is that it's a policy of that favors those "that are already there" at the expense of "newcomers". A special case of this is favoring older generations vs. younger generations. For instance, in Berlin I know people that have locked in a low rent on an old contract who chose to say in their rental despite owning real estate close by. So for them - who have been there for decades - rent is very affordable. On the flipside, it's very common for dozens or close to a hundred people showing up for open houses when a new rental comes onto the market (still at the prescribed low rates!). Since landlords can freely choose between so many potential tenants they will pick high income, high stability tenants, making it very hard for younger or lower income folks to get into the rental market.
- snapplebobapple 2y ago
  If the rent control is binding enough to deter maintenance it is questionable whether it is even good for those already there in the long run
em500 2y ago
> So you get the first order effect you wanted "rent stays low in the area" It's not even clear that you get that. The conclusion only states that rent stays low for the dwellings subject to rent control, not for the area.

dmix 2y ago

That's the reason it keeps being tried. The side effects are wide, disparate, and over long timelines so it's easy to obscure the net negatives to the public. That plus "If construction rates decline that's the next generations problem. All I want is lower rent now". Which is an effective political gambit.

soramimo 2y ago

My mental model of rent control is that it's a policy of that favors those "that are already there" at the expense of "newcomers". A special case of this is favoring older generations vs. younger generations. For instance, in Berlin I know people that have locked in a low rent on an old contract who chose to say in their rental despite owning real estate close by. So for them - who have been there for decades - rent is very affordable. On the flipside, it's very common for dozens or close to a hundred people showing up for open houses when a new rental comes onto the market (still at the prescribed low rates!). Since landlords can freely choose between so many potential tenants they will pick high income, high stability tenants, making it very hard for younger or lower income folks to get into the rental market.

snapplebobapple 2y ago
If the rent control is binding enough to deter maintenance it is questionable whether it is even good for those already there in the long run

em500 2y ago

> So you get the first order effect you wanted "rent stays low in the area" It's not even clear that you get that. The conclusion only states that rent stays low for the dwellings subject to rent control, not for the area.