LogFAQs > #927529862

the thing about rent control, why I say I'm agnostic about it despite the near unanimity among economists about it, is that it's actually really difficult to find an unbiased account of the research; Lindbeck is often called a leftist or socialist by american economists, but within the context of his country he seems to be pretty right leaning and has some explicit intellectual connections with Buchanan, who we would call a libertarian. And even the quote from Myrdal is only found cited by a piece from Sven Rydenfelt, who is an explicitly libertarian economist. The citation is for "Opening Address to the Council of International Building Research in Copenhagen," and I have no way of verifying its accuracy

other than that, its mostly industry white papers that I can find that give a 'good' literature review on the issue

when you start looking more deeply into it than the economics 101 textbooks, you find that modern day rent control policies are more accurately referred to as rent stabilization policies, and this calls into question the applicability of prior research, and that the impacts empirically are mixed

e.g.

https://www.urban.org/sites/default/files/publication/99646/rent_control._what_does_the_research_tell_us_about_the_effectiveness_of_local_action_1.pdf

Although rent control has generally been found to have positive effects for residents in controlled units, these benefits may be offset by negative effects on the uncontrolled sector, which may see increased rents caused by constrained supply. Empirical work has found this effect at work in some locales with rent control. Diamond, McQuade, and Qian (2018) find that San Franciscos 1994 rent control law was directly responsible for a 5.1 percent citywide rent increase from 1995 to 2012, adding up to an extra $2.9 billion cost shared by current and future San Francisco renters. This matches the $2.9 billion that tenants in rent-controlled units received in benefits from the policy, and the authors note that this is a trade-off between benefits accruing to current residents and costs accruing to future ones. Likewise, a study of New Yorks rent-control policy finds that it increased rent in the uncontrolled sector (Early 2000). However, two studies of a 1994 decontrol initiative in Cambridge, MA, find that rent control actually reduced rents in the uncontrolled sector (Autor, Palmer, and Pathak 2014; Sims 2007). Authors in these studies argue that this was caused by spillover effects: landlords of controlled units were less likely to pay for upkeep, causing nearby uncontrolled units to decrease in value. This meant that the benefits of lower rents (even for units in the uncontrolled sector) came at the cost of quality deterioration.

Of course, this last finding isn't outside the realm of possibility from the persepctive of the anti-rent control side. But I think it undercuts their overall argument, which is that rent control reduces supply and increases demand, which should crowd out the maintenance problem -- especially for units which are only nearby dilapidated units and not dilapidated themselves

Now all of this combined does lead me to be skeptical of rent control efforts and to think that there are better policies to address the issue. But its a topic in which I feel people have ceded to expert authority without actually delving into the research. I've gotten libertarian economists really mad at me just because I ask for a non-ideological literature review that shows how devastating rent control is and I've never really been given a satisfactory answer

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