New Research on Rent Control Confirms Negative Economic, Social Impacts
03 May 2018 - 4:31AM
Business Wire
Rent control policies are laws that cap rents and are usually
implemented with the stated purpose of improving housing
affordability. In fact, they may do just the opposite, according to
an in-depth review of academic research on the issue conducted by
Dr. Lisa Sturtevant.
Among the conclusions Dr. Sturtevant’s review found are
that:
- Rent control and rent stabilization
laws lead to a reduction in the available supply of rental housing
in a community;
- Rent control policies generally lead to
higher rents in the uncontrolled market;
- Rent control and rent stabilization
policies do a poor job at targeting benefits;
- Rent control can cause renters to
continue to live in units that are too small, too large or not in
the right locations to best meet their housing needs;
- There are significant fiscal costs
associated with implementing a rent control program;
- Rent-controlled buildings can
potentially suffer from deterioration or lack of investment;
and,
- Rent control policies can hold rents of
controlled units at lower levels but not under all
circumstances.
Dr. Sturtevant’s literature review examined research published
from 1972 to 2017 and includes case studies of programs in single
markets, such as New York, Boston, Los Angeles, San Francisco,
Santa Monica and Washington, D.C., as well as studies that take a
cross-sectional approach across markets. It synthesizes the
empirical research on the effects of rent control and rent
stabilization on individual renters and communities, building on
prior evaluations of the rent control literature.
“We understand the desire of communities dealing directly with
the nation’s shortage of affordable housing to find a ‘quick fix’
like rent control, but unfortunately what looks like a ‘free’ and
easy solution comes with a lot of negative, unintended consequences
that actually make the situation worse,” said NMHC President Doug
Bibby.
“Ultimately rent control discourages new housing production,
which limits supply and raises rents for everyone else not lucky
enough to secure a rent-controlled apartment. Instead of relying on
a policy approach that has failed in communities across the
country, lawmakers should consider options that provide more
housing that is affordable to people at all price points,” he
added.
NMHC stands ready to help solve the affordability crisis that
communities across the nation are facing. However, an overly
cumbersome regulatory system, rising land and construction costs,
neighborhood opposition to new housing, often prevent us from
building the housing the nation needs. Instead of looking to failed
policies like rent control, public and private stakeholders need to
come together to find ways to both build more housing and reduce
housing costs.
The literature review can be found here.
View this press release online.
Based in Washington, D.C., the National Multifamily Housing
Council (NMHC) is the leadership of the trillion-dollar apartment
industry. We bring together the prominent apartment owners,
managers and developers who help create thriving communities by
providing apartment homes for 39 million Americans. NMHC provides a
forum for insight, advocacy and action that enables both members
and the communities they help build to thrive. For more
information, contact NMHC at 202/974-2300, e-mail the Council at
info@nmhc.org, or visit NMHC's web site at www.nmhc.org.
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NMHCColin Dunn, 202-974-2370cpdunn@nmhc.org