Research Suggests Rent Control Can Have Unintended Consequences

Rent control is gaining support nationwide, and states including California, Oregon and Illinois are considering overturning laws that restrict rent control from being enacted locally. The Brookings Institute investigated the economic effects of rent control and found that rent control may be effective in lowering rent costs in the short-term, but can often restrict the long-term supply of rental housing by disincentivizing landlords from putting units on the market. The author characterized this effect as a transfer between future renters — who pay higher rents due to reduced supply — and those living in the cities when the ordinances first take effect. Rent control is popular among many advocates, but its unintended consequences may indicate that other methods of improving housing affordability have better prospects for success.