Comment by gbriel 2 days ago
Rent control is not a great solution long term since it reduces the incentive to build more housing which is the only real fix. It ends up making the problem worse. I could see in times of economic downturns, a temporary rent control that automatically expires to help people figure out their situation short term (moving is expensive).
The pricing signal malfunctions when homeowners and landowners control land use to such a degree that regulatory constriction stops housing. Usually this is zoning as the primary blocker, but there can be other blockers too.
One of the problems with rent control is that it pushes the class politics so that renters with housing act more like landowners than they do new tenants, and they conspire to also block housing. People are change averse, even if they don't mind the change after they see it; before the change it's a big threat. This hurts any tenant that needs to move due to things such as becoming an adult, finding a new job, starting a family, getting a divorce or ending a relationship, etc.
Rent control is great as a tenant protection to prevent evictions via rent increases, but it is only a short term protection for tenants otherwise, and can hurt tenants greatly if there's not enough building.
There's good evidence it's mostly zoning and permitting. You might be shocked if you look at the SFH zoning in your city when you realize how much the municipal gov has just banned denser housing development.
Look what happened in Austin, TX, which has much less housing regulation tamping down construction than CA (despite a good deal of local NIMBYism).
Prices spiked during the pandemic, and in response a shit ton of housing was built, much of it multifamily residential. Rents went down significantly and home prices are down 20% since the peak.
The lack of construction is mostly to do with most major US cities just not allowing enough construction. You can see the contrast with the handful of places like Austin that do allow construction, where rents have consistently dropped year-to-year even though the population has increased significantly.
This. It’s NIMBY politics at the local level. Go to your county/city board meetings and ask for plans.
Agreed. And local NIMBY can get surprisingly personal and politically vicious fast.
I have a friend who argued in public forums (local newspapers+blogs) for denser housing being more walkable and sustainable (in a wealthy small neighborhood we both lived in.) "Small towns" was/is the nationwide name for the trend.
Unknown opponents dug up and published dirt on him that even his wife, friends and employer didn't know. It was quite sobering.
And so they keep blocking efforts by resorting to smear tactics. Own it and reverse it back on them. Debate class 101, they have nothing if they attack you personally.
It sucks that your friend had his closet ransacked for skeletons. This is why I’m completely honest with mine.
You're gonna go to those meetings and find that it's not "what's allowed" that's fucking people out of the ability to construct things, it's all the capricious requirements that the process saddles them with before being allowed to do what is allowed.
There are a lot of counties that also use construction permits and inspection requirements as a source of income and charge absurd fees for it, on top of being slow and unpredictable even if you do pay. And a slow inspector or slow permit approval also costs money in the form of builder's and laborer's time that you get charged for as they sit around waiting for someone else to arrive.
I don't think construction has nearly as much relevance for Austin as you might think. Speaking as a former Austin resident, I left Austin in 2022 because rent highly spiked and I was effectively priced out of where I was staying (my rent spiked in the realm of 40%).
Rent has been cooling off in Austin because the amount of people moving there has heavily gone down and tech companies have either stopped opening new buildings there or have outright started to leave. The huge rise in rents was effectively due to a 'tech speculation' bubble as a result of every major tech company saying they were going to move to Austin and it was going to be the new tech capital of the US.
This is the economist theoretical consensus justification though in real life tbh I dunno if I've noticed any real difference when looking at housing development patterns across Canada where there are many jurisdictions with rent control, many without, and many with some sort of blend (ie. no rent control on new builds).
If there is some incentive toward development in non-rent control jurisdictions I suspect it's strongly dominated by other factors.
(ie. Montreal probably has the most restrictive rent control in Canada but it's also seeing the strongest apartment development growth)
Canada is a basket case for housing development but the only bright spots for outpacing demand with housing are Albertan cities with no rent control like Calgary and Edmonton.
Edmonton recently outpaced Toronto in housing development on an absolute basis with much lower housing prices and less than 1/5th the population!
The regulatory environment in Alberta is such that it permits housing to be built, and it does.
The same cannot be said of Toronto (or everywhere else in the nation that isn't the Prairies for similar reasons), for landed interests and the bureaucracy and corruption that comes with them are a lot more entrenched in that area.
Edmonton housing prices have gone up in 2025, Toronto's have declined. Alberta's population is growing, Ontario's is shrinking.
Those are the two factors explaining the housing starts, not the ineffectual rent control that exists in Ontario.
I think you're neglecting that most of Toronto is restrictively zoned for SFHs while Edmonton is upzoned across the city for 8-plexes at a minimum.
Toronto has a cumbersome permitting process that runs from months to years, while Edmonton's process is mostly automated and grants permits within weeks.
Regardless, the other relevant factor here is the actual price of housing, which is substantially higher in Toronto... and yet Toronto struggles (by design) to build anything.
Toronto has as-by-right fourplex zoning replacing its SFH zoning. As-by-right means automatic permitting, no delay.
haha i misread casual as causal, but i guess, here are the "accurate conclusions" you are looking for, that is to say, what does rent control cause, as opposed to the vibes and correlations people are talking about?
it's the "credibility revolution" and someone has won a nobel prize for it.
rent control causes limited mobility (read: displacement out of town) by 20 percent; it causes reduced rental housing supply by 15 percent:
https://www.aeaweb.org/articles?id=10.1257/aer.20181289
rent control causes reduced property values:
https://economics.mit.edu/sites/default/files/publications/h...
You don't need a study to tell you that if you make things more difficult and worse for landlords, the housing supply will decrease.
Courts actually need to do their jobs here for an optimal solution - e.g. it should be easy to punish shitty landlords AND easy to kick out shitty tenants.
It shouldn't take a 1+ year wait (as during COVID) to get a landlord-tenant court date to resolve issues.
The housing issue is multi-faceted however, so that's only 1 piece of the puzzle. But thanks to NIMBYs and building code overreach, it's literally impossible to build affordable housing that would rent at its own depreciation schedule.
People are able to move around, to some degree, so housing prices are a function of supply across most of the nation. Or at least the desirable portions.
Rent control on the other hand has mostly local effects.
Which means, rent control can push prices down and keep them down. There is indeed a supply reduction, and prices on average will go up—but not in the rent controlled area.
It’s still a poor idea, but it requires centralised planning to avoid.
> Montreal probably has the most restrictive rent control in Canada but it's also seeing the strongest apartment development growth
A wonderful city like Montreal can drive enough demand for housing to overcome red tape, and still be building far far less than what would satisfy demand. A less attribute city with lower demand for housing may build less due to lower demand, despite having less red tape.
Trust the economists on this one.
I lived in downtown Montreal and it could just be me but the housing stock was not of the highest quality compared to most other places in Canada. Montreal as a whole feels rundown (I say this as a former Montrealer who’s lived in many places since). Cheap rent though.
I used to agree with this, but nowadays it seems that the factors constricting housing supply are in many places related to zoning and regulation, not the ability for developers to make a profit, so rent control might have much less downside than economists have conventionally assumed.
EDIT: I am seeing a nephew comment that says rent control could make NIMBY politics even worse because it makes renters' interests more like homeowners'. Hadn't thought of that.
I cringe every time some youngster suggests we go down the socialist/communist path because none of them have any real-life experience with how bad Eastern Europe was! Here's a hint: It's was fucking beyond belief horrible--everyone was poor, there was nothing to buy in the stores, and people spent most of their free time drinking themselves to death.
On the other hand, I live in Norway. Bits like healthcare and a good safety net makes things nicer. I'm from the US originally. This nice stuff could be adapted for the US if folks would put their energy into helping others rather than spite.
Mismanagement of resources is bad no matter what system is used. Just because some under one sort of ideology and corrupt leaders failed doesn't mean that folks can't take the bits that were good, adapt and improve them, and see good results.
I cringe any time someone points to a failure in an unimaginably different circumstance as evidence for why something won't work here.
Some people get bit by a dog and are afraid of dogs their whole lives. It's irrational.
Also, socialism and communism are not synonyms.
Doesn't it seem ingenuine how everything good is socialism and everything bad is communism? Also if socialism can't compete with capitalism then it's doomed. Socialism must make capitalism illegal in order to succeed and I don't want to be in a place where capitalism is illegal. And "market socialism" is not socialism either.
> Doesn't it seem ingenuine how everything good is socialism and everything bad is communism
Who is making that claim here? It seems ingenuine to bring that up when no one's said anything to that effect in this comment chain.
I find that rent control is a good idea in theory, but leads to a lot of deadweight loss. As a former renter, what I really wanted was a predictable cap on rent increases. For folks who are long-term renters, without controls and predictability, their only option would be to move every few years, which is incredibly disruptive.
From my understanding, European countries tend to have restrictions on what lease renewals can look like and with declining home ownership (and ownership being priced out for many), I think we should look at European models for real solutions to our housing crisis.
Rent control is not good in theory, it's the most universally hated policy among economists because it has so many horrible unintended effects on housing development and maintenance.
That’s because it’s not an economic policy but a humanistic one. Stable housing should be a right. If rent control was the default, then obviously no renter would vote for arbitrary rent increases in exchange for maybe, someday in the future, rent going down due to increased housing supply.
Good intentions count for nothing. Good intentions that create bad policy that harms people counts for much less than nothing.
rent control (which realistically for all but the most idealist is some sort of capped rent increase policy) can only work if its done and owned by the state/nation. It can't work for private sector as the ROI will be relatively poorer on doing that vs many other investments so it'll actively disincentivise investment into more rental housing long term & in short/medium term disincentivise all but necessary capital/maintenance investment as it'll quickly erode whatever small return they're making on their rental investment.
State/National government are far more likely to stomach lower ROI than the private sector because they can arguably have a more holistic view of what their investment is. However, to be able tod that you also need robust finances in government which has certainly not been the case in most developed western economies since the 80s
This is an important distinction. Most "rent control" laws are intended to be "rent stabilization" not outright price fixing. Their goal is to prevent insane swings in rent happening too quickly, which disrupts families and local economies (and even infrastructure development).
But the worst/most aggressively laws are always used as the examples, skewing the conversation to edge cases and ignoring the fact that these laws can and do take hundreds of different forms.
RealPage is gaming rents against tenants. It’s artificial rent inflation by algorithms. I agree on rent control. But unless realpage is controlled and regulated rent control is the only option.
> Rent control is not a great solution long term since it reduces the incentive to build more housing which is the only real fix.
In California (and SF in particular) rent control applies to housing older than 15 years and owned by corporate entities.
How does rent control applied as it is in California disincentivize building? I would think that building would be incentivized by rent control because newer housing stock would be exempt from rent control.
> Long term they wouldn't be, and hence lower ROI and therefore disincentivized
While the ROI would be lower compared to allowing rent to increase uncontrolled, in a rent control zone there is more incentive to build (and renovate) to take advantage of market rate leases for (in California's case) 15 years.
Does the argument that rent control (as in California) disincentives building reduce to the argument that uncontrolled rent yields a higher ROI than rent control?
Such an argument is a refusal to allow public good for the benefit of landlords.
So you may mean well but a comment repeating the (debatable) negative impacts of rent control really comes off as silly in a thread about the realpage cartel (price fixing is worse than rent control in every way) and hopes of home ownership (demand for primary i.e. non-investment homes is unaffected or increased by rent control).
Rental income should not be the primary reason for housing to be built in the first place, so I don't buy that argument. The primary reason to build housing should be demand for home ownership. The volume of housing that ends up on the rental market should only be a small fraction of the total volume.
Instead of rent control, I propose a forced buy-out model: if the current tenant can manage to buy the home they're currently living in, the landlord is not allowed to refuse the sale. And banks are not allowed to deny such a mortgage if the monthly installments amount to less than the current rent.
Again, you are just discouraging people from building more homes. People like to create financial Rube Goldberg machines to address high housing prices, but the solution is simple: Add supply.
Now adding more supply is not trivial in many cases, but at least people can work on the correct problem to solve once it's identified.
> should only be a small fraction of the total volume
Which is? Lot's of people are happy to rent, want to rent, will never want to own a home, want mobility, etc. I rented for nearly 20 years and only past few years went into situation where I want to buy a house. Should I be denied renting?
There's obviously premium to be paid while renting too. There should never be a situation where rent is cheaper than mortgage.
Populist rent control is an excellent motivator to get counter-parties to the table to discuss productive alternatives in a market where no outside pressure currently exists.
There is no silver bullet solution. Rent control can be a big part of that solution, but what’s ultimately needed are a combination of policies that disincentivize the hoarding of housing as an asset class, promote home ownership itself for stability and community rather than fiscal nest egg, mandate denser housing in areas served by mass transit, tax land properly by removing caps on yearly increases, protect renters from unnecessary evictions (lack of renewals, no-fault evictions, etc), removing zoning laws on residential and commercial space (essentially reducing zoning laws to industrial vs non-industrial) to speed up approvals for construction, and get the government more active in meeting the needs of its populace through public housing programs (like Singapore does).
It’s highly complex and nuanced. I’ve long since stopped entertaining smug clapbacks from armchair economists who aren’t involved in the boots-on-the-ground issues at hand, and you shouldn’t parrot them around for them.
> Populist rent control is an excellent motivator to get counter-parties to the table to discuss productive alternatives in a market where no outside pressure currently exists.
This makes no sense, the battle is ultimately between renters and owners of low density housing. Those owners don't care about rent control, they only care about zoning disallowing construction of new rentals. If anything, they're probably happy to see rent control if it means the pressure on cities to upzone is removed.
All things being equal - commuting times, service access, property availability, environmental impacts, education quality, economic stability - then yes, the solution is “easy” in that we “just need to build more housing”.
Once any of those multitude of variables aren’t equal, however, the market can and will exploit it. This is the reason why the housing crisis is global, but the solutions are variable. In New England for instance, there’s a glut of available property currently being hoarded and vacant as an investment hedge, because we have no more land to expand onto. Combined with vacant towns that were former industrial hubs, and there’s an awful lot of available real estate to be clawed back for better use - except markets have been tailored to specifically promote a hoard-and-hedge strategy that harms the working classes (renters and homeowners both), and keeps depressed communities from rebounding. Remote work had a real shot of revitalizing those towns and shattering the vice grip of Capital on land or housing through the relocation of workers to cheaper markets, but the RTO mandate essentially amplified existing crises that much more and robbed them of the chance to rebound.
So no, it’s not as easy as building more housing, it’s also about ensuring those who need housing get access to it first, rather than those who simply seek to extract rent or hold it as an investment hedge.
Again, there’s no silver bullet to this problem.
New England has vacancy rates noticeably under the national average (https://www.huduser.gov/portal/periodicals/USHMC/reg//NewEng...). There's no 'glut' being 'hoarded'.
Why do you say rent control reduces the incentive to build more housing?
To me it seems the opposite: Rent control means supply goes down, so available building & land prices go up. These prices going up means an opportunity for builders who are good businessmen because they are going to make a margin on their investment, the bigger the investment the bigger upside.
Another intuition is with rent control it's hard to extract new value from an old building, so that also incentivizes tearing it down and squeezing more units into the land.
In SF, rent control exists on all buildings built before 1979. It appears to me that people who prioritize new builds pay a huge premium for them. I think this particular rule also incentivizes tearing pre 1979 structures down, vs the no rent control newer buildings can continue to have growth in the value extracted from them.
It reduces the incentive to build because it reduces the ROI on a new build and reduces the control the owner has over the property (places with rent control are notoriously tenant-friendly, meaning the risk of taking 12+ months to evict a tenant has to be priced into the project as well).
The cost of building housing is generally labor + materials + land, of which the first 2 are generally don't have runaway costs as they are not an investment category.
Land is something the government can help with if they choose to do so.
The rent is tied to the price of the apt, and since housing has become and investment category, has increased exponentially.
By controlling rent, you control real estate prices as well, as investors will find it a less attractive asset.
In a free market economy, the cost of things should be controlled by a market equilibrium, so building shouldn't cost more to buy than it is profitable to build tem.
But supply is often restricted by artificial means, meaning prices go up, that's where rent control comes in.
Two wrongs don't make a right, but saying not having rent control while clamping down on construction isn't true to the spirit of the free market.
Rent control will reduce supply even more. It’s piling on another wrong.
In SF rent control only applies to buildings that are like 40-50+ years old. Yet people still complain as if it stops new housing. If you combine this with the idea that rent control raises prices for everyone else, you'd think people would be knocking down the doors to build: artificially high rents for decades.
Rent control absolutely causes a reduction in supply: there's a reason rent controlled buildings have apartments in poor condition that owners do not renovate (so a reduction in quality supplied) and many are held off market or converted to owner occupancy through condos and TICs (so a reduction in quantity supplied). Not to mention the units underused by long term tenants who maintain them as secondary residences.
Central to the challenge of UBI and housing costs is the law of rent. UBI could work if all its redistribution was not immediately captured by landowners. There are ways to make that possible.
Rent controlled apartments being held by tenants no longer using them as primary residences is pretty common. A famous case of this was Cleve Jones in San Francisco who tried to make it a huge political deal when his landlord raised his rent to market because he was 1. living in Guerneville full time and 2. subletting the apartment. The media environment is one where it's ok for a master tenant to be a de facto landlord and make money on real estate, as long as it's not the landowner themselves!
>> UBI could work if all its redistribution was not immediately captured by landowners.
Doesnt this happen now because we're all so tethered to HCOL cities? With UBI presumably people would be geographically free, and there is a lot of inexpensive land and housing around the country. Doesnt the capture problem only happen due to scarcity in HCOL cities and thus not an issue?
Yes but it builds into my argument - it does not counter it. Reduced supply... increases rent. I'm saying "increased rents + rent control not applying = more people should want to build". And the person I'm replying to said rent control makes people not want to build.
> I'm saying "increased rents + rent control not applying = more people should want to build"
This is false. People will want to build more on the margin, but that doesn't mean they want to build. If the profitability requirement (hurdle rate for getting investment from institutions) is greater than the the market rent, people will not build even if market rent is high. Indeed, that's what's happened in the last 5 years as costs have increased much faster than rents.
Rent control also switches the class politics, as people who are paying far below market rate for housing become like landlords and homeowners: getting free imputed rent.
People have been knocking down doors to build in SF for decades, but do not because regulatory capture by homeowners, landlords, and those with below-market rents are happy to keep out new people.
Where and when housing gets built in the US is not merely a market driven decision: you also need to get local permission to build.
And for some hard data, here's a meta-study on the subject: https://www.sciencedirect.com/science/article/pii/S105113772...
> [A]ccording to the studies examined here, as a rule, rent control leads to higher rents for uncontrolled dwellings. The imposition of rent ceilings amplifies the shortage of housing. Therefore, the waiting queues become longer and would-be tenants must spend more time looking for a dwelling. If they are impatient or have no place to stay (e.g., in the houses of their friends or relatives) while looking for their own dwelling, they turn to the segment that is not subject to regulations. The demand for unregulated housing increases and so do the rents.
The talking point of "Rent control = bad" has always been disingenuous because it's parroted most often by the people who will be hurt from it the most (landlords). Home supply is already artificially constrained, regardless of rent control. Mostly because wealthy landlords form cartels to prevent new housing in major metro areas.
Rent control is just one tool that can be used to regulate housing, and it works in conjunction with other tools (e.g. rent control exceptions for new construction).
The U.S. already has an excessively de-regulated housing market, and it clearly has not worked for most people. Anyone that says regulation is bad here is almost certainly protecting their self interests.
Rent control is fundamentally unfair and socially undesirable. We should encourage labor mobility, not discourage it.
CA has a similar issue with prop 13 for housing which I also oppose.
Also it’s silly to say the US housings market doesn’t work for “most people” considering the home ownership rate is above 60%
I don't see how you can claim a home ownership rate above 60% means the market is working for most people.
All that means is that a majority of the population was able to buy a house at some point in time under some conditions. The recent data is clear: people who already have homes, are staying put in them. And a growing portion of people without homes are joining a fairly new class of "forever renters".
The median age of first time home buyers was 33 in 2020. In 2025 it is 40.
That's truly incredible if you think about it. In just 5 years, the median age has increased by 7 years.
Here's another interesting statistic: the percentage of homes bought by first time buyers is down 50% since 2007.
> Rent control is fundamentally unfair and socially undesirable.
I think this is an incredible claim to make. Unfair to who? Undesirable compared to what?
Rent control at it's core is a redistribution mechanism. It favors existing tenants at the expense of property owners.
If you care about low income renters getting displaced by a 40% rent increase, then it is a desirable mechanism.
Personally, I believe that housing security should be a right, and it’s just not possible to have that when your rent can spike arbitrarily in the future for reasons outside your control. Young people with no local connections and limited belongings might be able to move every few years, but it’s downright traumatic for older people. Based on my lived experience, I will always vote for rent control while simultaneously pushing for more housing. The economic arguments against it are almost irrelevant.
I'm a renter and a parent in NYC, and I totally get where you're coming from. On a personal level, I'd love rent control that would freeze my rent and give me some stability. I'd also love it if NYC would build millions of new housing units, but that doesn't seem to be forthcoming.
That said, I also think that city policymakers have a responsibility that extends beyond just what will make life better for the current residents of their city. I wish rent control had better data supporting it, but everything I've seen suggests that while it might make things better in the short-term for some, it makes things worse in the long-term for everyone.
> Rent control is not a great solution long term since it reduces the incentive to build more
It is exceptionally rare for new construction to be subject to rent control laws, unless they utilize special tax breaks or government subsidies. It does nothing more than slightly inconvenience the investor class, who usually aren't thinking past 15-20 years anyway, when rent control laws might theoretically impact their investment.
If the price without collusion is $X and the monopoly pricing behavior raises it to $(X+1), you can cap it at $X without causing any problems.
If house prices and rent being this much higher than they were in, say, 2000, relative to wages, wasn’t enough to trigger an enormous housing construction boom, I don’t think further-increasing rent or house prices are likely to do much good. Something about that “signal” is already badly malfunctioning.