The evidence that rent controls are harmful is overwhelming. They:
- lead to deteriorating quality of rental units
- cause black markets to develop, with landlords requiring side payments
- create increased opportunities for discrimination (especially against immigrants, single parents, and students)
- reduce the supply of rental units, making affordable housing even more difficult to find.
Imagine my shock when I read this piece at the Washington Post blog. The piece begins harmlessly enough, explaining how the "pencil" highrises (tall, narrow buildings) that are popping up all over Manhattan and Washington, DC, are emerging as a solution to increased demand for housing in major urban centres. But suddenly it concluded,
The pencil tower isn't a pretty solution to the problem of exorbitant housing costs, or an elegant one -- rent controls or a more redistributive tax code would help urban residents more directly -- but it is a straightforward way of addressing the housing shortage that is causing financial hardship for so many Americans.
Huh? Rent controls? Really?
The evidence is overwhelming that rent controls, over the long haul, lead to reduced supply of housing, in part because developers hesitate to build rentals units if they think rent controls will be slapped on them. Also, in the face of rent control, many landlords convert their units to condos.
Rent controls might be good for those who pass through the filters and screens and get a nice unit at a low rent. But they also make many people who are disadvantaged worse off by leading to a reduction in the supply of affordable housing.