Can Rent Control Be Abolished? Rent control makes housing less affordable to anyone seeking housing in a rent-controlled market. Even people who already have a “great deal” under rent control become prisoners of their own apartment. They can never move because it means being thrown into the shadow market, where prices may be three or…
Shortages Under Rent Control – The New Evidence What happens to price and availability of unregulated housing in a rent-controlled market? To determine this, this author collected data on all the available apartments advertised in eighteen major cities around North America. The advertised prices were taken from a single Sunday edition of the largest paper…
Shadow-Market Housing In large metropolises, a housing shortage can severely damage the city’s economy. Experience shows that when such cities adopt rent control, they usually try to avoid outright housing shortages by leaving segments of the market unregulated. Unsatisfied demand is diverted into this unregulated sector. Because of the shadow-market effect people in this sector…
ent Control and Vacancy Rates There can be no doubt that rent control creates housing shortages. For almost 20 years, national vacancy rates have been at or above seven percent – a figure generally considered normal. Cities such as Dallas, Houston and Phoenix, where development is welcomed, have often had vacancy rates above 15 percent. …
Few Low-Rent Units with Rent Control The concept of shadow markets offers a reasonable explanation of why the results of rent controls are so perverse and why they lead to a sense of helplessness and panic in a rent-controlled population. Although rent controls are widely believed to lower rents, data I have collected from eighteen…
Recent Rollbacks Nevertheless, rent control is proving vulnerable. On January 1, 1997, Boston, Cambridge, and Brookline became the first major American cities to abandon rent controls since 1950. The process was not altogether voluntary. The initiative came from a statewide campaign organized by Boston and Cambridge property owners, who put up a state ballot initiative…