Rent Control
- Idea of rent control sounds great
- Prevent rent increases
- Make housing "affordable"
- Actual result:
- Control of rents makes building rental housing unattractive
- Existing housing deteriorates as rent does not cover rising costs
- Value of rent-controlled property drops
- People hoard rent-controlled apartments
- Long-term renters get the real benefits - below-market rents
- Long waiting lists for rent-controlled apartments
- Serious housing shortage results
- Housing usage is inefficient
- Investors build everything EXCEPT rental housing
- Rents on unregulated units soar
- This increase is then used to justify more rent controls
- Assumption #2 wrong
- Stronger rent controls produce greater housing shortage