What do studies say about "freezing the rent"?
Let's have a thread🧵
First thing's first: Most studies agree that rent controlled units have lower rents, but also the supply of rentable units goes down and un-controlled units see their rents increase.
Uh-oh!
Let's have a thread🧵
First thing's first: Most studies agree that rent controlled units have lower rents, but also the supply of rentable units goes down and un-controlled units see their rents increase.
Uh-oh!
Rent control also means that fewer homes get built, and it means that housing quality drops.
After all, if you can't raise the rent, what incentive do you have to make everything sparkly and neat?
After all, if you can't raise the rent, what incentive do you have to make everything sparkly and neat?
Rent control lowers residential mobility, meaning people stay put longer
That's not good because it causes misallocation
Consider an elderly family whose kids left the nest. They should move to a smaller place, but rent control keeps them in place, so new families can't move in
That's not good because it causes misallocation
Consider an elderly family whose kids left the nest. They should move to a smaller place, but rent control keeps them in place, so new families can't move in
Rent control causes shortages—it lowers the supply of units to rent.
But, curiously, it increases homeownership.
How?! Because landlords convert their apartments into condos and sell them. Those are "homes", they're just less available to early career and poor people.
But, curiously, it increases homeownership.
How?! Because landlords convert their apartments into condos and sell them. Those are "homes", they're just less available to early career and poor people.
In short, rent control is a policy that's momentarily good for you if your rent gets controlled.
It's bad for people like young families, people who want to move to a new city, economic growth in general, and everyone in the long run.
It is an unjust and unacceptable policy.
It's bad for people like young families, people who want to move to a new city, economic growth in general, and everyone in the long run.
It is an unjust and unacceptable policy.
And it hurts.
But today, New York is likely going to vote to expand rent control.
They're going to vote to have the city decline in prominence, welcome fewer people, grow less, and become a duller, poorer place relative to the New York with less rent control.
But today, New York is likely going to vote to expand rent control.
They're going to vote to have the city decline in prominence, welcome fewer people, grow less, and become a duller, poorer place relative to the New York with less rent control.
This is good for economists, who will get to write yet more papers showing that rent control hurts based on the experience of New York City.
But it's bad for New York City, bad for America, and bad for the world.
But it's what people are voting for. Decline is what people want!
But it's bad for New York City, bad for America, and bad for the world.
But it's what people are voting for. Decline is what people want!
If you want to learn more, go check this out: sciencedirect.com/science/articl…
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