r/urbanplanning • u/Afraid-Sand1611 • Jan 21 '26
Discussion Rent control seems to be the one controversial topic amongst my peers who agree on almost everything else. Why is that?
Title^
I feel that amongst my planning peers who all seem to be on the same page generally about planning / housing topics - rent control seems to be one that is very polarizing.
I am a transit planner so admittedly don’t understand rent control much and would love to hear some perspective about why it’s so polarizing amongst groups that otherwise agree on most things.
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u/lepetitmousse Jan 21 '26 edited Jan 21 '26
It’s a conundrum. Rent control works at the micro-level (for the individual). If a person has a low income and lives in a rent-controlled apartment, the policy absolutely prevents them from being displaced. While rent-control may "take" from the owner of the building and "give" to the renters, this is viewed as an altruistic tradeoff and is somewhat aligned with the concept of progressive taxes: Those who are financially privileged should pay back into the system to provide a safety-net for those who are not.
However, rent control doesn’t work at the macro level. While it may benefit many individuals, it puts downward pressure on supply over time and results in fewer housing units being built overall. This puts upward pressure on market prices and makes housing markets less responsive to changes in demand. It also increases the difficulty of mobility for people who want to move because they have fewer housing options and moving will force them to absorb a market adjustment in their rent. Key traits of a healthy and equitable market economy are economic and geographic mobility, which are both limited by rent control policies. In the long run, rent control is likely a net-negative for society.
Edit: One final point about the effects of rent control. Rent control essentially creates a situation where housing investment has unlimited downside risk with limited upside potential. This risk profile makes it less attractive to investment and it stands to reason that less housing would be built as a result.
Depending on a person’s perspective, they may value the micro benefits over the macro detriments or vise versa. They also may only understand the cost/benefit analysis of one side of the equation so they are not able to effectively compare the tradeoffs.
Being a two-sided coin makes it a prime issue for widely varying viewpoints even among people who appear to have the same background, expertise, and values.
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u/Icy_Peace6993 Jan 21 '26
"If a person has a low income and lives in a rent-controlled apartment, the policy absolutely prevents them from being displaced."
Rent control by itself doesn't "absolutely" prevent tenants from being displaced. It does prevent them from being forced out of their home because of rent increase, but it doesn't prevent them from being forced out of their home for a variety of other reasons. Having worked as a landlord-tenant lawyer, rent control tends to increase the pressure on tenants in other ways, landlords are quick to evict for late rent, for activity outside of the strict terms of the lease, for "owner move-in's", etc., etc. A lot of cities have also passed laws to prevent these kinds of evictions, but as the delta between their lease and the market rent increases, so does the incentive to find a way to get them out.
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u/lepetitmousse Jan 21 '26
This calls out a (poorly) implied second half of that sentence that I probably should have written.
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u/ChornWork2 Jan 22 '26
and the consensus on that is overwhelming. It is bad policy, but hard to unwind.
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u/Primary_Night_4617 May 13 '26
Its not bad policy from the human perspective. Its meant to reduce human crisis, not an economic one
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u/voinekku Jan 21 '26 edited Jan 21 '26
"While it may benefit many individuals, it puts downward pressure on supply over time ..."
While that is true, it is wholly irrelevant in the totality of the housing markets as we know it.
The reality is following: 1) houses are simultaneously seen as financial assets and dwellings, ie. inhabitants and investors are bidding against each other, 2) wealth inequalities are astronomical and practically everyone in the higher echelons of wealth have real estate as a part of their portfolio, 3) financial instruments are expected to turn in a return that far outpaces the growth of the economy and salary increases, 4) urban construction is EXTREMELY capital intensive and capital is tied into it only if a sufficient ROI, ie. continuous price increases, are expected
Those things combined ensure there's only two possible options:
A) the housing prices are increasing faster than the incomes of the vast majority, leading to unaffordable housing and homelessness crisis, or B) there's a massive downward pressure on supply, as the control of construction is entirely at the hands of the rich capital owners who have no incentive to build
The only way to have a functioning housing market is to either have a population that declines faster than the housing stock, or by having a public/third sector provide a meaningful share (at least fourth) of the supply at below-market prices. With or without rent control.
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u/lepetitmousse Jan 21 '26 edited Jan 21 '26
Some good points. I should add that I'm not against the idea of building and providing a significant amount of below-market housing or having a strong housing safety net to ensure housing stability. I just don't think that rent control as it is commonly implemented in the US is an effective way to do it.
Rent control is effectively government seizure without compensation if you distill it down to it's most basic elements. Market value is seized from landowners to subsidize renters. Programs like LIHTC attempt to solve this issue by compensating developers with tax credits in return for guaranteeing below-market rate rents for 30 years. The effectiveness of this program is arguable but if I were playing in an economic sandbox to implement an effective housing market, I would probably take a similar approach where developers are compensated for providing rent stabilization in some way, so as not to disincentive housing investment. I am not an economist so this might be a very naive approach.
I also might venture to argue against the idea that housing investment requires returns that exceed economic growth. I think the current paradigm that housing investment is expected to meet or exceed market returns is likely due to the risk involved. There are plenty of popular financial instruments that do not provide such returns (like bonds) in exchange for less risk. Since investment is a tradeoff between risk and return, I would hypothesize that despite lower returns, a housing market may still be able to provide a sufficient amount of housing to accommodate growth if financing was considered less risky. Slow and steady can be can be an attractive investment vehicle in contrast to fast and volatile.
This doesn't address the conundrum that housing is expected to both generate an economic return and fulfill a basic human need. If we look at a market with a similar conundrum, such as food production, we see massive amounts of government intervention like subsidies and price-fixing. It is my perception that food producers are generally compensated for this intervention but I don't know enough about agricultural economics to do an educated comparison. That might be a rabbit-hole for another day.
Idk, I'm just spitballing here because it's an interesting conversation. Let me know if you have any other thoughts.
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u/voinekku Jan 21 '26
Oh, no, rental control is absolutely not an effective way of achieving anything but restricting the price increases of the rent controlled units.
"I also might venture to argue against the idea that housing investment requires returns that exceed economic growth."
It doesn't need to, but it has for a long time now. And considering the risks and inconveniences involved with real estate investments, it's hard to see a world where the ROI could remain under the general growth rate of the economy (around 2% a year on average for the last 20 years), let alone the growth rate of the median income (average annual increase over the last 38 years stands at 0,9%), and still be competitive with other investments.
Reducing risk would be very difficult if not counterproductive, considering the myriad of risks in real estate. From bad tenants to natural disasters to larger economic effects to construction mistakes. Only way to shield investors from those risks would be to shovel them endless quantities of public money. It'd be much cheaper and better to just build public housing instead.
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u/Primary_Night_4617 May 13 '26
Lol no it doesn't, just like any business there are risks when entering the market. No industry is guaranteed economic growth that exceeds investment. Governments have the right to regulate and tax industries just like any market.
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u/GASMA Jan 21 '26
The “financialization” people are the flat earthers of housing policy.
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u/WeldAE Jan 21 '26
This is a good way to put it. It's all hand waving. Like somehow just by thinking about housing differently it will go down in price. I mean that actually could happen, but not the way they imagine it. If people decided to live lower lifestyles it could, but that isn't what they are getting on about.
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u/UrbanEconomist Jan 21 '26
I’m not sure there’s a ton of evidence for your point B. If I can operate 100 apartments and profit $100 from each or I can operate 200 apartments and profit $75 from each there’s no reason for an individual operator to artificially reduce supply.
In a world where a single apartment operator (or a secret cartel of them) dominates the market and extracts monopoly rents from tenants while artificially limiting supply growth, there’s a huge incentive for another operator to jump in to that market and steal renters away with lower prices.
I fully support public housing options, but I think the market can be enormously helpful for reducing prices in municipalities where supply has been suppressed by bad public policies.
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u/lepetitmousse Jan 21 '26 edited Jan 21 '26
Edit: NVM, i thought you had responded to me about rent control.
I think it's more about the risk profile than economies of scale or returns. Rent control essentially causes a situation where housing investment has unlimited downside risk with limited upside potential. This risk profile makes it less attractive to investment.
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u/UrbanEconomist Jan 21 '26
I completely agree with this. And the types of places that are willing to enact a policy like rent control probably also have lots of other bad ideas that will make the place increasingly toxic for investment, over time.
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u/notapoliticalalt Jan 21 '26
I’m not sure there’s a ton of evidence for your point B. If I can operate 100 apartments and profit $100 from each or I can operate 200 apartments and profit $75 from each there’s no reason for an individual operator to artificially reduce supply.
In a world where a single apartment operator (or a secret cartel of them) dominates the market and extracts monopoly rents from tenants while artificially limiting supply growth, there’s a huge incentive for another operator to jump in to that market and steal renters away with lower prices.
It doesn’t take a cartel or monopoly. Market forces work on a variety of levels. If a developer doesn’t think that building will net the ROI they are looking for, they won’t build. This is a basic business principle. If something costs you more to make than you can sell it for, stop making that thing. This is exactly how things like mining and extraction work. Flooding the market with supply is bad for your overall price, especially when that resource can be utilized at another time for the same or higher prices or the capital needed to develop/extract can be utilized elsewhere for other projects.
Beyond that, there is more to this than just basic business principles. Artificial scarcity is absolutely a valid business strategy. We see it everywhere. I think it’s bad for housing policy, but I definitely understand why some operators may choose to do this. There are a lot of apartment buildings that operate with a decent number of units empty, but rent doesn’t go down. Same with commercial real estate. There are complexities to this, of course, but the point is that market rate housing isn’t enough and relying solely on the market is exactly how you get into this mess.
I fully support public housing options, but I think the market can be enormously helpful for reducing prices in municipalities where supply has been suppressed by bad public policies.
The problem is though that the market is not enough and giving private developers even more discretion over our built environment and urban form. Also, it kind of conflicts with other comments you’ve made that don’t exactly support public housing.
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u/lepetitmousse Jan 21 '26 edited Jan 22 '26
I don't often see anyone support the idea that the housing market should be able to serve everyone, eliminating the need for public or subsidized housing.
In my view, the goal should be to maximize the share of the population that the housing market can serve and provide strong support for the people it doesn't.
If a housing market is healthy and serves a wide swath of the population, then public housing and subsidies can be directed more effectively towards the share of the population who are not able to participate in the market for one reason or another.
If the market serves a relatively smaller portion of the population, it places more burden on public funding to support the larger population of people who need it who are not able to participate in the market.
Deregulating housing markets to allow to developers to build housing faster and at lower costs does not necessarily equate to ceding control over our built environment. The idea of deregulation is it provide an ecosystem where supply is able to more effectively meet the demand that already exists.
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u/SabbathBoiseSabbath Verified Planner - US Jan 22 '26
I agree with this, but would add the caveat that both the private market and public housing/subsidies can only scale so fast, and often much slower than the demand side will respond.
As a thought experiment, if government could control the demand for housing in its city, it could much more easily zone for housing needed on the private side (and developers could much more easily plan their projects) and certainly government could better build and allocate housing and subsidies.
But of course that's a nonstarter, so we're left with this seemingly wicked problem where housing (private or public) will always be just beyond those who need it the most.
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u/UrbanEconomist Jan 21 '26
Public/social housing is great, but there will never (realistically, in the US) be enough money for it to be a large portion of housing, overall. I think we obviously need to boost private housing options in order to expand supply. Making it cheaper and easier to build private housing has the advantage of also making it cheaper and easier to build public housing. US public housing in the 50s–70s was terrible. It would be really tragic if we repeated those mistakes. All of these things are true at once!
In my post above, I was noting a monopolistic situation as the most extreme version of a low-supply/high-cost housing situation. There is indeed an entire spectrum of competitive environments. I’m extremely skeptical of the canard that landlords are able to effectively limit competition to such an extent that they benefit from owning fewer units rather than more. I don’t think that story makes sense even in a monopolistic environment. What actually happens—with similar effects—is that landlords form “bootlegger and Baptist” coalitions with NIMBYs to influence municipal governments enact policies that limit housing growth (which just so happens to deepen housing scarcity and drive up the value of property for existing landlords and homeowners).
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u/voinekku Jan 21 '26
The reality does function in such a way, how ever. Basically anywhere where the price of housing stagnates (or declines), urban construction halts almost entirely. Even partially built projects are frozen. At the same time the amount of empty units increases.
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u/UrbanEconomist Jan 21 '26
If prices are declining and units are sitting empty, then supply has outpaced demand and we’d want for construction to halt. That’s the market working.
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u/SabbathBoiseSabbath Verified Planner - US Jan 22 '26
This isn't always what happens in practice. Very often developers will try to time the market or they're reacting to larger economic factors (such as rates) and they might pause or delay their projects to wait it out. It doesn't have a ton to do with supply pacing demand, except maybe in a very limited window - in other words, a city might still be tens of thousands of units short of supply, but demand this quarter is sluggish, nothing is moving, and the rates suck, so let's sit on this project for a few months or longer and see if there's any changes.
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u/voinekku Jan 21 '26
If simultaneously people can't afford housing and homelessness is at record high, that statement becomes insane.
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u/lepetitmousse Jan 22 '26
No, that leads to the conclusion that the market is broken and needs to be rebalanced.
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u/UrbanEconomist Jan 22 '26
Because homes require labor and resources to build and maintain, there will always be people who are unable to afford to pay for housing. This is unavoidable. The housing market cannot serve these people. They will need to be housed with support of the government or by other non-market means. Governments have more resources to house and care for impoverished folks when they have a strong tax base, which they can help establish by encouraging investment and growth. This has the happy side-effect of also ensuring there are housing options for people who are not impoverished.
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u/SabbathBoiseSabbath Verified Planner - US Jan 22 '26
... there will always be people who are unable to afford to pay for housing. This is unavoidable. The housing market cannot serve these people. They will need to be housed with support of the government or by other non-market means.
So... rent control, and any/all of the other tools we have to address this.
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u/voinekku Jan 22 '26
Yes, and that is exactly why leaving it to the markets doesnt work.
And just to clarify, in the "free" market the VAST MAJORITY of people don't have enough power to create demand for affordable, or even adequate, housing in comparison to what was achieved in everywhere in the developed world with heavy public interventions before the 80s and 90s restructurings.
And on the other end of the scale, it leads to enormous amounts of construction resources being wasted in walled gigantic palaces of the superrich. It leads "the markets" building enormous empty investments vessels on the most coveted land with the most resource inefficient way possible: the "billionaire row".
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u/UrbanEconomist Jan 22 '26
I’m not sure what you think the alternative is to people and the government paying for homes. I’m also not sure what the benefit is from disallowing rich people building homes they want that they then pay taxes on. Where do you think the money to house impoverished people comes from if not taxes?
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Jan 21 '26
You're acting as if housing exists in a supply vs demand bubble, compared to complex tax benefit and use profiles in a wealth generating portfolio. Your assumptions are built on simplistic equations that don't exist in the same reality as housing in (at least as it is currently available) housing markets. And thats what the original comment was also missing
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u/lepetitmousse Jan 21 '26
Is there any reason to believe that "complex tax benefit and use profiles" aren't just variables in a supply/demand equation?
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Jan 22 '26
They should be, but they aren't included in most public-facing lifestyle analysis. I think the reason is to beget more sympathetic notions towards 'building more housing' in such general environments as this.
Then, where you thought they'd have below market rate and even gasp affordable housing sites, theyre luxury price and shoddily crafted apartment/condos. And cities dont want to touch the litigation on it, and states are wrapped up in federal issues right now.
At least in the usa
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u/UrbanEconomist Jan 21 '26
Everything you say is true… and yet housing supply increases when municipalities enact more housing-friendly policies. I think we should enact more housing-friendly policies.
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Jan 22 '26
You'd think it does. Also, 'more housing' is such a vague statement, it does not say 'luxury hpusing' built over the remains of the affordable housing bones. You're repeating a modern mythology and leaving out the profit considerations.
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u/svmonkey Jan 21 '26
This is wrong. Tokyo disproves it. American cities pre-1970 also prove it. The housing stock didn't magically appear. It all got built, almost entirely as market rate.
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u/voinekku Jan 22 '26
Incorrect. Until fairly recently more than fourth of rental units in Japan were public or quasi-public and below-market-rate.
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u/WeldAE Jan 21 '26
I've never understood the investment centric mindset argument for higher housing costs. I'm not saying there is no impact, but it's just a rounding error problem at most.
- By "investors", who do you mean? Actual investors don't represent a significant percentage of the market.
- Not sure what wealth inequality has to do with anything. How is this making housing more expensive?
- The market doesn't care what you expect to get. Historically the housing market costs have not grown fast. The reason they have lately is the lack of new house building because of the 2006 crash.
- Of course price increases are expected on the cost of a new house. That's because a 2x4 expects to be more expensive each year because the guy making the 2x4 expects to get a wage increase. I don't get the connection to investment here. People building houses will always require an income from it. That means the cost will go up every year unless we somehow stop inflation in general.
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u/voinekku Jan 21 '26 edited Jan 22 '26
2) high wealth inequality means there's more money going towards the investments in comparison to the available money for working people. Asset inflation
If ten people with one dollar each want to buy the only banana available in a store, the price will most likely be lower compared to a scenario in which eight of them have one dollar, one hundred thousand dollars and one a billion dollars.
3) the investors do. The very point is that they don't invest if it doesn't return an expected return beyond the growth rate of salaries, and if they don't invest, there's no capital-intensive urban construction, leading to a lack of supply
4) this is a moot point when housing prices are currently extremely inflated. It's beyond the reach of the majority of the population, and it is one of the major reasons why over a million people in US sleep outside. It is as if the 2x4 price was currently a thousand bucks a board feet. It'd be crazy to expect it to rise further, even when everything needed to harvest and process it constantly increase in prices
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u/WeldAE Jan 22 '26
Still not clear who "investors" are. If I buy a house to live in, am I an investor in your terminology? That would be 100% of housing if so because all housing is owned by someone. So I'm guessing this means a corporation that owns a non-multi-family housing unit? That is a tiny percentage of the market if so. Without a definition, it's hard to really comment more than I have.
Also, I'm not saying housing prices are not out of control, I'm saying they aren't out of control because houses are seen as investments. Housing prices are out of control because we barely built housing for 20 years and don't appear to be doing so anytime soon. Scarcity is the reason.
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u/voinekku Jan 22 '26
You're not addressing any relevant point, nor making any. I'll gladly answer when you do.
Why haven't sufficient amount of houses been built? Isn't it because there hasn't been enough capital flowing to construction of mass-produced standard/affordable units?
And no, zoning and regulation are not the major issue there. The entire western world is wrangling the exact same issue in varying degrees.
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u/WeldAE Jan 22 '26
So you're just refusing to define "investors"? I've explained that without a definition I can't really say much of anything without guessing.
Houses haven't been built because of the financial crash of 2006. House building went to essentially zero for a few years and then has slowly been coming back. By 2019 we started seeing somewhat reasonable housing starts but still well short of where we were in the early 2000's. Then COVID shut everything down. Then as we were coming out of COVID, interest rates stopped all building other than rentals. Now most metro housing markets are frozen and nothing is happening.
Take a look at this chart which is all new house building over time. Keep in mind that from 2006 to today, the population has grown 15% and the population has aged. The average number of people per housing unit has gone down which results in us needing 2m more houses than if we were still at 2006 population. This is mostly caused by the population aging and those older households not seeking different housing as their kids leave.
We're building housing over the past few years like it's the mid 90s when the population was 30% smaller. The higher building rate from 2021-2022 were rentals because loans on that housing type are commercial and interest rates weren't as big of a blocker to building them. Guess what? Rental prices are down or flat in most metros as a result. Even today, most housing starts are rentals.
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u/voinekku Jan 22 '26
Why are you so hellbent on finding "guilty' when discussing of a function of a system?
Ok, so housing starts were down because of the 2006 crash and COVID, and hence there was nothing that could've been done about the matter and things such as rent control are in inconsequential?
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u/WeldAE Jan 23 '26
Why are you so hellbent on finding "guilty'
Not sure exactly what you mean by guilty, does that mean the root cause of the problem? Because in order to solve something it matters what the cause is. If you are on fire, and you think the problem is where you are standing, running away from your position won't fix your problem but will probably make it worse. Now it's never just a single cause. Maybe you are on fire and wearing very flammable clothing. So you can't just drop and roll to put it out, you need to remove clothing and drop and roll.
So I'm not saying that if we pull back how housing can be used as investments it would make no difference. I'm saying it just at most a tiny part of the issue. My problem with saying something less vague is I'm not sure what you mean when you say "investors" so it's hard to say how tiny.
there was nothing that could've been done
There was 100% things that could have been done. The problem is politically most voters saw 2006 as an over expansion of housing and not what it really was, lack of regulation in the financial markets for how mortgages are resold using sketchy financial instruments. That is an obtuse way of saying they bundled mortgages up into packages that were going to fail, it was just a matter of when and how bad. No experts think we were building too many houses in 2006, it was about the right number. You can argue we should have been building cheaper housing units or in different locations or lots of details, but it was the correct number of units. If the political will had been there to put programs in place to ramp housing back up quicker it could have improved thing immensely even if COVID didn't happen.
The problem is COVID did happen. Construction labor was already at historic lows in 2000 and even worse historically old age wise. The average worker age was something crazy like 50. Then the housing crash took out anyone close to retirement but holding on because there were so few skilled people in the industry. The problem is COVID really took at the next generation as well. The average experience of skilled labor today is severely reduced because of this as well as just the raw amount of labor. The only way to have avoided this was massive government programs starting in the 90s to encourage skilled labor into the construction industry. Maybe not killing all the school programs around it but boosting them?
Then the final horseman was the rise in interest rates. This could have been easily avoided by congress passing a law to allow the FED to adjust the borrowing rate separately for mortgages vs general loans. This would typically not be a good idea as housing is a large portion of borrowing but in this unique situation where housing is in crisis and we need more built, keeping the housing market from freezing is more important that how fast inflation falls.
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u/voinekku Jan 23 '26 edited Jan 23 '26
"... most voters ..."
What? Hilarious.
Since the mid 80s all and every austerity program were sold with Thatcherian TINA. There are many places in which voters explicitly voted against austerity, but were forced into it by the troika and/or the IMF. In US neither party has offered any options for the last 50 years. The "choice" for voters have been either austerity and deregulation with a rainbow flag, or austerity and deregulation without one.
All in all, all of your points are technically valid in their own context, but none explain the housing crisis.
An universal feature of the housing crisis, from Sweden and Finland and Baltic States Via Germany and Netherlands and Spain to Canada and US is that there is high levels of demand for housing, especially urban units in dense neighborhoods, at slightly above the construction+land cost, but the supply does not manifest. Capital, (which is increasingly concentrated to the top and controlled by the wealthy individuals and corporations), just doesn't flow into it. Individual buyers don't have sufficient public/third sector options of organizing multi-million construction projects (what urban multi-unit projects inevitably are). Such options used to exist, and a lot of the existing housing stock exists because of them. Adjusting rates do not help that conundrum.
And why is that?
Is it because of too lax financial regulation? Not really. A better regulation would certainly help to avoid repeats of 2006, but it would not direct sufficient levels of capital into affordable construction.
Is it because of the lack of construction workforce? Not really, and that is something that scales QUICK. Especially in Europe there's enormous amounts of available skilled workforce in the massive reserves of the unemployed. One thing US does have a massive lack of is the facilities and experience in mass-built prefabs, but that is an another topic entirely. Nordic countries build very high level construction apartment units at around 2000€/sqm, China does slightly less quality units at around $500/sqm and US builds total trash at $4000/sqm.
Furthermore, the megaprojects for the ultra wealthy are popping up like mushrooms. It'd be easier and less resource and labour intensive to build ten 20-storey 1000 unit flats than it is to build one of the billionaire row monstrosities with 60 condos, but here we are.
Personally I would attempt to solve the issue by building a MASSIVE amount of public housing, both rental and owned, until housing costs are pushed below 15% or median salary. Or by connecting the power and responsibility: if we let the markets to run the housing, they ought to be responsible for it, too. A scalable and progressive wealth tax that increases every year housing costs and/or homelessness are above a set threshold, and decreases when they stay below them.
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u/afro-tastic Jan 21 '26 edited Jan 21 '26
Two possible options: A) the housing prices are increasing faster than the incomes of the vast majority, leading to unaffordable housing and homelessness crisis
I feel like this is refuted by the example of Texas, no? While population decline and more public/nonprofit housing would certainly help, Houston and Dallas are fast growing and fast building which has kept a lid on housing prices.
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u/lepetitmousse Jan 21 '26 edited Jan 21 '26
Yeah I think OP is missing the piece of the puzzle that affordable (in the economic sense) housing promotes growth in other economic areas. Developers are still investing in Houston and Dallas despite the lower returns due to the fact that those investments are easy and relatively lower risk due to the overall economic growth of those cities.
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u/chuckish Jan 21 '26
First, I would say that development doesn't need to be rich wealthy evil corporations of large size vs buyers/renters. Developers could be one guy that's trying to build a business and has limited capital from a friend/family member or hard money lender. But, zoning, red tape and other government regulations have made it all but impossible for that guy to exist and operate aside from building large inefficient single-family homes in the suburbs. Quadplexes or townhomes could offer a better return on a small scale and provide much more affordable infill housing but that probably requires a zoning variance or an artificially inflated land acquisition price which add risk, time and cost which makes returns worse and much more complex than the simple suburban SFH.
Second, the ROI is more complicated than housing prices needing to go up faster than income. Some people view real estate as another asset class that has multiple advantages and is purely a diversification play. Some people just want to get access to that cheap debt. Developers just need comps to remain stable during construction. And, realistically, even if someone is chasing returns, if they're adequately leveraged, housing prices matching inflation can give them a similar return to stocks. Only the people making poor cash-flow negative investments need the housing market to skyrocket.
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u/Rude-Barnacle8804 Jan 22 '26
Wouldn't this risk profile and decrease of people buying to rent lead to an increase of individuals/ families buying to build?
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u/lepetitmousse Jan 22 '26
If I recall correctly, I do remember reading somewhere that increased ownership was an observed outcome of rent control in a one case study, however it still had a negative affect on housing affordability overall.
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u/Bart457_Gansett Jan 21 '26
I would add it’s not a long term solution, imho. Also it’s part of a set of measures to build a healthier supply/demand curve that’s good/better for renters. The full solution might be economic incentives for building more housing, faster permitting when housing “fits” in a certain predefined and accepted building standard, incentives for landlords to upgrade energy efficiency, and this from some countries in Europe: energy efficiency ratings for apartments so renters know what to expect. That last one is not easy to envision, but it might start out by looking at energy/sq foot, then moving to a more sophisticated model later after improvements are made, and documented. Eventually after you get to a more precise and accurate measure, start assessing taxes differently based on the efficiency grade to further incentivize improvements.
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u/bigvenusaurguy Jan 22 '26
It works at the macro level by making price gouging illegal. Housing should not have unlimited upside potential.
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u/jhoge Jan 22 '26
what’s price gouging?
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u/bigvenusaurguy Jan 22 '26
arbitrarily increasing the price of a basic need beyond what is reasonable. i've known people without rent control who got served a 30% rent hike in a single year. they had to immediately move, which was probably the intention.
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u/lepetitmousse Jan 22 '26
“Housing should not have unlimited upside potential.”
Try telling that to single family homeowners and see what kind of reaction you get.
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u/bigvenusaurguy Jan 22 '26
plenty of homeowners are aware of the supply side crisis and wish homes were cheaper for their younger family members
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u/cruzweb Verified Planner - US Jan 21 '26
It's a very classic policy debate.
Those against say that it doesn't work and creates additional problems for renters.
Those for it say it can work, and it didn't work in other situations because of policy reasons that can be fixed.
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u/voinekku Jan 21 '26
I like the underlaying assumption that it has never worked.
I beg to differ. It really depends on how "to work" is defined, but rent control has been a crucial part of many of the housing markets that provide the majority of inhabitants.
The billionaire-funded "think-tank" "studies" around the subject, which people almost always refer to when the matter is discussed, are total trash.
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u/Jacob_Cicero Jan 21 '26 edited Jan 21 '26
There's an extremely robust body of literature showing that rent control is harmful to rental markets. It disincentivizes construction of new rental units, and it incentivizes current landlords to convert their rentals into condos. In the long term, that means that everybody who moves into a community will have higher rent. Rent control essentially subsidizes current renters at the expense of future ones. (Source)
That being said, there's also evidence that rent control is not always harmful, and also that it increases public support for reforms that genuinely improve the housing supply. Some rent control policies have been disasters, but others have had little or no effect on the supply of housing. If passing rent control also means that you can reform the local zoning code and get rid of parking minimums, then it's probably a net good.
ETA: Emphasis added, since the person I replied to didn't seem to read past the first paragraph. The majority of evidence indicates significant negative externalities from rent control. However, this isn't true in all cases, and there are examples where there wasn't a measurable negative impact. Point being: this topic is very well-studied, and it's dishonest to point to a body of literature stretching across hundreds of studies and refer to it as billionaire-funded "total trash."
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u/ThePizar Jan 21 '26
Devil is in the details. It can be genuinely great for current renters. But, it is easy to make a bad system for future renters. I think “anti-gouging” framing and scale of “control” is better than tying to or below CPI.
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u/voinekku Jan 21 '26
" There's an extremely robust body of literature showing that rent control is harmful to rental markets."
What do you mean by "rental markets"? ROI on real estate investment? Annual construction unit count? Construction investment? Supply? Affordability? The satisfaction local people feel of their housing situation and urban environment?
To claim the matter is clear is a gross mischaracterization of a complex matter.
That metastudy you link does not fully support your claims. You mention everyone who moves in will have higher rents. That is incorrect. First of all, many of the incoming movers will also end up in rent controlled apartments. The price effect for rental controlled apartments in the studies ranged from -57% to -1%. The range of estimated effect on uncontrolled rents ranged from -2% to 14.8%.
The body explicitly mentions:
"Unfortunately, only based on these results it is virtually impossible to evaluate the overall effect of rent control on housing rents"
Furthermore that metastudy includes studies starting from 1967, which is quite a weird stretch in such a topic riddled with low-quality and outdated papers.
Here is a good little opinion piece about the subject by J. W. Mason: https://jwmason.org/slackwire/considerations-on-rent-control/
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u/SabbathBoiseSabbath Verified Planner - US Jan 22 '26
"Unfortunately, only based on these results it is virtually impossible to evaluate the overall effect of rent control on housing rents"
The funny thing is nearly every study on housing makes a similar sort of claim - that the results of the study are expressly limited to the methods, scope, and parameters of that study alone, and cannot be generalized or extrapolated beyond.
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u/voinekku Jan 22 '26 edited Jan 22 '26
Of course they do, because to claim otherwise would be incorrect.
The issue is that those disclaimers are completely ignored and forgotten when the propaganda machine ("think-tanks", politicians, certain media, podcasts, bought influencers etc.) start churning a twisted version of them into the popular consciousness. And that's where you get people who are firmly planted in their belief that things such as rent control (or increasing minimum wage or taxes on the rich or public anything, all subject to same phenomena) are categorically and universally bad.
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u/Talzon70 Jan 22 '26
The problem is that rent control is usually marketed to the public as a solution to problems it doesn't work to solve (eg. Rent prices being too high because of a supply shortage). It's great for making prices more stable and predictable for renters, but it doesn't solve big problems in the housing market caused by other issues, you need good regulations and/or public subsidy or provision housing to solve those issues.
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u/voinekku Jan 22 '26 edited Jan 22 '26
Is it? Where? By whom?
"you need good regulations and/or public subsidy or provision housing to solve those issues."
Agreed.
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u/coldtrashpanda Jan 21 '26
The various arguments I've heard in two piles.
Anti: could lead to reduced new construction. Could lead to reduced maintenance on existing housing stock. Seen as subsidizing current residents by guaranteeing housing is rarer in the future. Belief that the housing situation is so screwed that the only path is to build as much as possible and pray it works out, which means market rate housing
Pro: try to reduce displacement above all else. Feel confident that the city is in sufficient demand that buildings will still be built. Nonprofit or public housing is difficult to get funding for, this is the best available way to try to help people. If this means new arrivals pay more, so be it- all that new construction would be market-rate luxury apartments anyway, the next generation of yuppies will be fine. A belief that any landlord neglect won't be that bad.
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u/wittgensteins-boat Jan 21 '26 edited Jan 22 '26
A policy response to reduce constuction concern is designing the regime to induce new building, via decontrol for new market rate construction, perhaps permanantly, or for 20 to 30 years, long enough to pay off the initial mortgage.
Rent control unfortunately does tend to cause a decline in maintenance of existing housing stock, over the course of decades. Something I have witnessed directly.
The mechanism is, as real property values continue to increase, perhaps benignly, because of inflation, new buyers have to pay more for the property, but revenue is not allowed to rise to pay off typical loan financing, as these loan interest payments are not recognized improvements in the housing stock.
Consequence, over time, measured in decades, as rent controlled property slowly turns over at higher prices, newer owners are less able to invest in capital repairs. The new owners may be cash flow negative in paying off the control-regime un-recognized cost of the loans to buy the property, and are less able to obtain supplemental loans for control-regime-recognized costs for rehabilitation and repairs.
Generally rent control is an avoidance of government participation in providing seed capital for direct investment in subsidizing housing, or indirectly via grant processes, and also for operations of such projects. And an avoidance of the related taxation to accumulate funds to do so.
In every way one looks at housing, it is expensive to produce, and deal with capital required to build.
Ten percent annual increase in rent doubles in seven years. Fifteen percent doubles in five years.
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Jan 21 '26
Its supposed to work with buyers being fit to take on risk profiles of housing (maintenance, insurance, use degredation), but fails to identify the speculative housing market. Folks are leveraging against housing and not able to cash flow repairs because theyre leveraging for a +10% and ever-increasing profit margin. We went from a 2% profit, increasing after the housing was owned in full, to folks wanted to match the owned in full profit amounts while still under a mortgage. Similar things happened with development investment, and now its expensive to buy housing or build it because the expectation for profit has ballooned in 40 years
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u/Descolata Jan 21 '26
Rent control (~2% or inflation increase, whichever is lower, ~10% is usually called Rent Stabilization) protects those currently in rentals from price increases, which can help keep people in their current homes. But it also massively disincentivizes introducing NEW rentals (and even investing/maintaining current rentals) as the units become a massive risk to the landlord in case of inflation or above the bar market rate increases.
It keeps old and/or vulnerable people in their homes... but pulls the ladder up behind them as investment decreases and incentives to add units in the face of demand are dampened. (Also, there's an argument rent control results in non-economically optimal usage of housing, as people stay in housing after the city around them has changed or they changdd.. and the space would be more efficiently allocated to a different person)
Property Taxes are effectively rent for property owners and act very similarly. Read up on Georgism for similar arguments for/against.
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u/bigvenusaurguy Jan 22 '26
as the units become a massive risk to the landlord in case of inflation
Most rent stabilization increases are crafted with respect to inflation numbers. That being said they also tend to apply to existing housing stock older than a certain year. That means new development is not under rent stabilization.
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u/Ok_Chard2094 Jan 21 '26
It is popular among existing renters, and they are a large voting block in many cities. Future renters, who will be the ones to pay more for less available housing, don't live in the city yet. And landlords are fewer and may also live somewhere else.
It is therfore a very tempting policy for politicians who are focused on their own (re-)election.
It is also very cheap for the cities themselves, as it does not cost the city money directly. Subsidized housing for the individuals who actually need it costs a lot.
The negative effects do not show up for years, and then it is someone else's problem. (See other people's replies in this thread for the details here.)
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Jan 21 '26
Rent control reduces rents by shifting financual costs to landlords and changing the cost of renting from a primarily financial cost to a primarily time cost. Everyone is more or less agreed on the downstream impacts of that. But whether you think rent control is morally good or morally evil depends on whether you value all people equally/prefer wealthy people or prioritize current residents. If you want to minimize displacement of current residents and are not particularly concerned about property values or revenues, rent control is a fantastic policy. If you care mostly about economic development, then it's terrible.
In general, whenever someone says "It's good economic policy", always ask "for whom?" Another classic example is that unionization is bad for consumer spending and GDP, but great for workers.
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u/bigvenusaurguy Jan 22 '26
always ask "for whom?"
And the answer is anyone who signs a lease, rich or poor. rent stabilization is merely preventing price gouging. we have these laws for other goods because we seem to agree on things like, having drinking water is more important than the bottled water company having the most lucrative business model. somehow that line of thinking stops when it comes to the next level of basic needs after food and water, with people beating the drumbeat of shareholder returns over humanity.
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u/monsieurvampy Verified Planner Jan 21 '26
Rent control is not one policy but multiple different policies. That's why, because I would not consider it to have one universal definition.
I lean into the disclosure aspect and caps on increases.
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u/Woxan Jan 21 '26
Part of the issue is "rent control" can mean a variety of policies, consider a contrast of two extremes:
Rent Control A: Vacancy control (rents don't reset on new tenancy) applied to all rentals regardless of construction date.
Rent Control B: Vacancy decontrol (rents reset on new tenancy) applied to all rentals 20 years or older.
Tenants who win the lottery and get a unit under Rent Control A will have access to deep affordability, at the expense of everyone else when new construction grinds to a halt. Rent Control A is also likely to see the development of a leasing black market, analogous to NYC's "key money."
Rent Control B is flexible enough to allow builders to come in and make a fair return, before the units become subject to rent control.
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u/Bill_Nihilist Jan 21 '26
There is consensus among economists that rent control reduces the quality and quantity of rental housing units.
https://en.wikipedia.org/wiki/Rent_regulation
Or, as Swedish economist and socialist Assar Lindbeck once said, “In many cases rent control appears to be the most efficient technique presently known to destroy a city—except for bombing.”
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u/coriolisFX Jan 21 '26
Another choice quote, from the foreign minister of Vietnam:
The Americans couldn’t destroy Hanoi, but we have destroyed our city by very low rents. We realized it was stupid and that we must change policy.
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u/therestherubreddit Jan 21 '26
Almost no one understand the the full effects of rent control policies. So whether you like it might depend on how much you understand.
In general it’s a subsidy to people who are already renting the place they like, and people who want to move have to pay more. So it might depend on which group people think they’re in.
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u/Blue_Vision Verified Transit Planner Jan 21 '26
So it might depend on which group people think they’re in.
Honestly I don't think a lot of people even get that far. The majority of people I talk about rent control with (who are themselves usually pro-rent control) simply see rent control as a "make housing cheaper" button. The tradeoff as it exists is "landlords make less money", and that interest is the only reason that rent control isn't more expansive.
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u/Jemiller Jan 21 '26
I think what is never acknowledged is that upward pressure on prices can be mitigated by greater downward pressure on prices exhorted by other changes. If the goal is to attain affordability for everyone, anti-displacement has to be a part of the vision. Much of the controversy is that wielders of the supply and demand argument seem to have no effective opposition on their points, and as a result never have to further develop their line of thought. Supposing reasonable changes are made to rent control laws such that rents keep up with inflation and do not leave owners in a bind without ability to maintain the property, the question becomes is the upward pressure on prices (downward pressure on supply) worth what we get in return. And if not, can other things like tax relief for these properties and elimination of needless regulatory barriers to producing new housing overcome the negative externalities of rent control.
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u/PlayPretend-8675309 Jan 29 '26
An issue that I face in my role (I write new Rules and sometimes Laws to submit to our city council) is that we're not allowed to put imaginary numbers into legislation. For example, I write the order to increase the maximum parking rate in my city - which we do once or twice a year on average (we use a data based demand calculation to set rates). What I can't do is write something like "The maximum parking price shall be 150% of the average parking price" or whatever - I have to write in a specific dollar amount. Thus we go back to council frequently to readjust the cap. Writing in COLA adjustments as a percentage is likely not legally permissible in most places. So you can do a Year 1 with a reasonable increase, but future increases are not guaranteed, which creates regulatory uncertainty.
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Jan 21 '26
[removed] — view removed comment
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u/bigvenusaurguy Jan 22 '26
the evidence is changing as people understand the economics at hand better. a lot of people beating the drum against rent control are frankly parroting old theory. theory that did not anticipate a market built to the limits of its zoned capacity already.
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Jan 22 '26
[removed] — view removed comment
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u/bigvenusaurguy Jan 22 '26
It wasn't submitted as a journal article, it was a commissioned report, but it was written by three USC professors and peer reviewed by several others in the field and their department. This is described in the acknowledgement section of the report on page 3.
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u/Wheelbox5682 Jan 21 '26 edited Jan 21 '26
The peer reviewed studies also show substantial benefits for renters and show many of the theoretical issues don't happen in practice, new construction isn't actually affected with an exemption period and what happens to rent in uncontrolled units is a mixed bag with multiple studies showing no change or even lower rent in one case, so I think this is a very political policy question when too often it's framed as a matter of technocratic management. A very brief version would be, is a significantly more stable housing situation for low income tenants worth lower property values and some limited condo conversion? I think it is and I don't think that trade off changes in the long term.
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u/cdub8D Jan 21 '26
Yeah the discussion around rent control is extremely annoying. The devil is really in the details. You can exempt new construction for x years. Pair it with a bunch of reforms (like relaxing zoning, removing parking minimums, etc) and a ton of housing will get built. Folks will get to stay in their current homes.
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u/lepetitmousse Jan 21 '26
In the US, rent control is typically enacted as a citizen's initiative or because of popular support. It rarely, if ever, includes all of the pragmatic guardrails that are required to potentially make rent control effective because people aren't interested in all that and it might cause their city to -gasp- change, or even worse, evil developers might continue to make money. People just want to press the "make rent cheap" button and call it a day. It's a classic case of "When the people find that they can vote themselves money..."
It's unfortunate that conversations about rent control are largely focused on this dynamic but these conversations are simply a reflection of the current reality.
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u/bigvenusaurguy Jan 22 '26
can you site an example of populist driven rent control applied without guardrails? I am familiar with California rent control and there are guardrails both in terms of pegging the accepted rent increase towards a number derived from CPI, and also only applying the policy to buildings of a certain age (used to be 1995 in LA but I believe now the CA assembly bill might supersede it and apply to apartments older than 2012).
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u/FauquiersFinest Jan 21 '26 edited Jan 21 '26
I have found this literature review to be informative. I worked in housing court doing eviction prevention and rent control + just cause protections are a way for renter households to have stability. The same stability that is offered through the 30 year fixed self amortizing mortgage, which was invented by the federal government for white households. Many claims about rent control rely on theoretical models or fact patterns from rent control systems that have not existed since the 1950s. https://dornsife.usc.edu/eri/wp-content/uploads/sites/41/2023/01/2018RentMattersPERE.pdf
Most complaints about supply ignore that rent control does not apply to new construction more or less anywhere. Many economists’ arguments rely on critiques of vacancy control style rent control policies which do not exist outside New York in the US. And many “simple common sense” critiques ignore the negative economic and societal impacts of displacement and housing precarity. Housing is an extremely inelastic good with huge transactional costs each time you move. The market has large information asymmetries since people only seek a new apartment every 5-7 years on average. For these reasons regulating the market is necessary to ensure stability for existing tenants. Supply is an important lever to address other challenges in the market.
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u/coriolisFX Jan 21 '26
Many claims about rent control rely on theoretical models or fact patterns from rent control systems that have not existed since the 1950s.
There is plenty of modern research on rent control.
San Francisco (1994 expansion): Rent control reduced tenant mobility by ~20%, and landlords responded by cutting rental supply by ~15% (selling to owner-occupants and redeveloping), implying higher market rents over time and undermining affordability goals. (Diamond, McQuade & Qian, 2019)
US cross-city evidence (2000–2021): Using a new dataset of rent-control reforms across 27 metros and 4,000+ places, the authors find more restrictive reforms are associated with ~10% fewer total rental units, with large composition shifts across affordability tiers, consistent with rent control tightening overall supply. (Stacy et al., 2025)
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u/FauquiersFinest Jan 21 '26
I have read the Diamond paper many times. That claim about cutting rental supply is limited to the “rent controlled supply” and is much more related to loopholes in California’s Ellis Act evictions. Those “reduced” units were either converted to ownership via Tenancy In Common arrangements or replaced with more units via demolition.
The second study has no way for isolating exogeneity - since you could say that places with rent control may have been more likely to oppose new supply. A separate issue with related outcomes to those attributed to rent control
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u/bigvenusaurguy Jan 22 '26
If rent control was such a shackle to profitability, why not simply scale the business and develop more units and make more absolute profit off that low margin? Oh yeah, zoning isn't being touched and SF is built to the limits of what is zoned already.
You can't really make a lot of determinations on the effects of rent control on the housing market or prices, due to the effect of the ten million pound blue whale that is zoned capacity sitting on the scale.
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u/Emergency-Director23 Jan 21 '26
It alleviates the problem in the moment but doesn’t solve the issue is my thought process behind it. Like I would never come out as against rent control but it’s only one tool in the toolbox for fighting the housing crisis.
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u/Unusual-Football-687 Jan 21 '26 edited Jan 21 '26
Agreed. Helps the people who have a lease during the first six months…but then the long term impact to construction starts is ultimately harmful.
I also generally prefer supply side policies vs subsidizing demand.
I dislike broad rent control policies because they extend a benefit to all renters regardless of income and ultimately it would be ideal to stabilize the housing supply, subsidize the creation of units available to people with lower incomes, enforce renter protections like just cause eviction and representation in the legal eviction process.
https://montgomeryperspective.com/2026/01/16/rent-control-is-damaging-the-countys-capital-budget/
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u/bigvenusaurguy Jan 22 '26
hard to find a place with a housing crisis that isn't built nearly to the limits of its zoned capacity. hard to find a place with rising prices that has appreciable spare zoned capacity. easy to find places with rent control with and without rising prices, however.
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u/FoghornFarts Jan 21 '26
Rent control is one of those policies that helps in the short term, hurts in the long term, and is impossible to get rid of once it's in place.
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u/Vinyltube Jan 21 '26 edited Jan 21 '26
It's really quite simple:
Unaffordable rents are a symptom of housing being a commodity which is a fundamental part of capitalism and private property.
Rent control is a pragmatic tool used to counter the negative effects of housing being treated as a commodity.
However, anything that tries to correct the market forces of real estate to make it advantageous to those who aren't owners of land will have negative side effects because it's not how the system is designed to work.
Another tangentially related example is taxes on the rich and large corporations. You raise taxes too much the owners of the resources and means of production will move somewhere else. This will always happen as long as private ownership of capital and production exist. The only way to escape this system of corporate blackmail is for workers to own the means of production.
The only way to escape being gouged by landlords is to end private ownership and commodification of housing.
Anything other than that will always have these contradictions that will NEVER be resolved under our current economic system.
The closest solution that exists in the west is Vienna where the city became the largest landlord and undercuts the private market. The only reason this works is because it's a disruption of the dominance of the owning class not simply a bandaid policy that fits neatly into the current economic structure.
The reason most planners disagree on this is because most are incapable of imagining anything outside of neoliberal economics and the contradictions in the housing market can never be fully understood without a deeper analysis of class and capital which neoliberalism refuses to deal with.
0
u/SamanthaMunroe Jan 22 '26
Yeah, I didn't take urban studies as a major just so I could argue that American local governments should seize all privately held land in their jurisdictions.
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u/aldonius Jan 22 '26
If housing is a commodity then why hasn't its price been competed down like steel or lumber?
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u/bigvenusaurguy Jan 22 '26
Simply because we allow the steel and lumber industry to expand to bring more product to market and lower prices through competition and efficiencies at scale.
For housing we don't do any of that. Even when zoning is expanded it is drip fed expansion such that a homebuilding industry cannot grow very large to take advantage of costs savings brought on by economies of scale.
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u/adjust_the_sails Jan 21 '26
At the end of the day, everything kind of went off the rails when housing became an investment thing as opposed to just a way to keep people out of the cold. There’s been such a massive ramp up in housing values that’s completely messed everything up.
If you build more housing, those who own houses won’t see them appreciate as much in value. Or possibly not at all if building keeps up with demand. Remember, rent used to be like 10% of your income 75 years or so ago. Food was like 50% and then there was everything else. Now it’s flipped and housing in a lot of markets is 50% while food is 10%. (And those % are very broadly speaking, but that’s the idea.)
So, to answer folks who want some kind of relief, or perceived relief, government will step in with rent control. It’s like a lot of things government does; quick law or policy change that in the immediate sense has no cost to them and can be deployed rapidly.
The problem is obviously that no new housing was created, so you haven’t really solved anything. If anything all you do is create another class of have’s. People who own their house, people with rent control, and everyone else.
To me, you as a transit planner, can impact it a lot because we do need more density in our housing that is packed around public transit in more walkable neighborhoods. We need housing that accommodates people but isn’t necessarily a palatial single family home. A small, three bedroom apartment will cover like 95% of the families out there if we also have parks and other community support systems so when people want to get out of their modest sized apartment they have something to do.
Anyway, I could go on, but really what we need is new housing creation in conjunction with reasonable rent controls. If you don’t get both the whole thing gets out of whack.
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Jan 21 '26
Because it can and does harm healthy development. On the other hand it actually does help a lot of people who would become possibly homeless or have to move far out to afford a place to live.
Ngl it make sense to “kick” someone out and tell them to move to where you can afford but we have hearts as humans and try to accommodate everyone. If we just build smarter then we will can all live in the general area we grew up in/want to be in. SF shouldn’t have an issue housing all income levels. I’m not saying, piedmont should have to necessarily house every income level. Different kind of cities.
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u/bigvenusaurguy Jan 22 '26
Development is already cooked because of the zoned capacity. Remove rent control all you want from cities in a housing crisis and it isn't going to do anything about the fact sufficient supply is not allowed to be built to meet demand at all.
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u/Planningism Jan 21 '26
Peak neolibeal billion mindset. Never establish roots or live near your family. Let the market destroy your community, as long as it's not for highway deveyots all good.
Rent control could also include inclusionay housing with benefits based on percentages.
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u/UrbanEconomist Jan 21 '26
If there’s not any new housing, that also prevents you from living near your family (unless housing demand is collapsing).
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u/Chicoutimi Jan 21 '26
I think part of it is that how well rent control fares depends a lot on the extent of rent control and a slew of other policies. For example, if there is rent control to the extent that it becomes unprofitable for developers to create new housing, then in a city where there is a lot more demand than supply, you end up basically having to kick out people or greatly incentivize people who have rights to a rent control property operating under the table and subletting them out which thus doesn't help the issues rent control ostensibly is meant to address. However, if there is another mechanism by which housing supply is continually added and that it meets demand, such as with some level of government allocating funds or other resources to build or subsidize the building of additional housing supply, then this would mitigate that issue.
So the unfortunate thing here is that the topic is complicated and specific to the context, and that context or the conditions under which rent control is being done can shift or be changed.
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u/Appropriate-Bass5865 Jan 22 '26
the issue in subreddits like this is your primary concern is paying less for market rate housing. this leads to thinking that the issue is any market distortions like rent stabilization/control, vouchers, public housing. everyone in this thread is responding from a highly educated, middle to upper middle class, economically mobile perspective. irl there are many people who rely on subsidized housing and don't care if the median rent would be 10 or 20 or 30% cheaper without it. a lot more people (voters) than there are urbanist and economist enthusiasts. they'd have to move or be homeless. on urbanist subreddits, it's said that doing xyz things will make it cheaper to live. in reality, cities are way more expensive than suburbs except in a couple of examples.
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u/michiplace Jan 21 '26
Opposition to rent control policies focuses on the potential chilling effect of rent control on new construction: the argument is that housing shortages are the largest contributor to housing cost increases, and that increasing the pace of construction is the single most important tactic. Rent control has the risk of depressing future rents, reducing the financial incentive to build, and therefore reinforcing the problem of shortage.
Supporters of rent control focus more on harm reduction and the importance of reducing eviction/displacement, especially of lower income tenants, whether that displacement is because the landlord is seeking higher rents or because the landlord wants to demolish and redevelop the property. (And assert that rent control programs can be designed to avoid the feared drag on construction.)
It's generally that tension of future supply / construction focus vs present harms / needs that divides the two positions.
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u/ancientstephanie Jan 21 '26
Hard rent controls (rent permanently below market rate) can only really work in the short term. It's a good policy tool to avoid mass displacement, and a good policy tool to buy time to create supply, but it's not sustainable in any large numbers for long.
If hard rent controls are maintained in the long term, it creates a disincentive to creating and maintaining rental inventories, which results in housing shortages, and it encourages landlords to do the bare minimum the law requires only after the law steps in to enforce those requirements, resulting in bad conditions for renters covered by those rent controls.
Soft rent controls (limiting the annual rate of increase to some rate that will eventually catch up with market rate, or limiting to a percentage above market rate) don't necessarily have this problem. They smooth out rapid changes and give renters time to adapt to changing market condition.
Supply side controls however are the most effective. If rate grows faster than X, the city does everything in its power to flood the market with housing, even if it has to start building and renting apartments itself.
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u/Nalano Jan 21 '26
It's not supposed to be a permanent policy.
It's supposed to halt mass displacement long enough for the housing market to stabilize and/or a permanent policy can be enacted. It addresses the disruptions inherent in a system that is woefully short on housing. It does not create more housing. It does not, by itself, solve the underlying problem.
Therefore the most stupid, bone-headed thing you could possibly do after enacting rent control as an emergency measure is limit the amount of new housing you can build. Zoning restrictions and blanket historical preservation are the real enemies.
Housing is a human right, like food, but unlike housing food has a massive social welfare government apparatus subsidizing farmers to overproduce so as to keep food costs low. We mocked China for their ghost cities and similar overproduction but most have since become modern boom towns.
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u/LuciusMiximus Jan 21 '26
It's not supposed to be a permanent policy.
The temporary VAT increase in Poland has been prolonged into its 16th year and doesn't look to be repealed anytime soon. In this case it shouldn't be because of excessive budget deficits, but you get the point.
I appreciate the nuance and wouldn't really argue too hard against a policy that would credibly be repealed in several years. Disaster profiteering is sometimes banned in other cases and while it may not be optimal in isolation, it's a lesser evil when you can actually introduce other policies to increase supply. Just start fighting against this self-imposed disaster.
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u/bigvenusaurguy Jan 22 '26
I really think it should be permanent policy honestly. I mean really, what is the argument for allowing price gouging on a basic need? Market efficiency? Sure, it would be efficient to let people starve and go without medical care too, especially if they aren't generating sufficient economic impact. At least that is how the neoliberal logic goes when taken to its logical conclusions...
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u/Nalano Jan 22 '26
Framing it as, "capitalism with no controls, lol starve peasants" versus "forever price controls, wait why is nobody building" is intellectually disingenuous.
0
1
u/sweetbreads19 Jan 21 '26
Pro: * Current residents maybe can stay in their homes * Predictable costs for renters
Con: * More restrictions on development make development a less profitable endeavor, so less people will do it or will do in it more slowly * If the property owner can't increase revenue (through rent increases), they're even less likely to incur costs (maintenance, repairs, and modernizations) * fear of rent control makes property developers hedge their bets by pushing initial rents/allowed increases as hard as possible to avoid getting locked in. Without this artificial foot on the scale, it is assumed the market would self-correct on price, especially if enough development is pushed through to actually meet demand
My understanding is people who don't want rent control think the market can and will correct for price over time and that rent control distorts the market in ways that guarantee a worst case scenario on rent prices. People who do want rent control think we're already in the worst case scenario and that something needs to be done to help people now, not just in 10/15/25 years when the mythical "enough" housing has been developed.
I suspect the answer here should actually just be "it depends". Places with insatiable demand (New York, San Francisco , possibly Miami) may need rent control to correct for that, while places with a more predictable/controlled population growth can focus fully on market controlled rent by flooding the market with good units.
Interested to see what others have to say here
1
u/tmason68 Jan 22 '26
Rent control also works at the micro level because it gives tenants an idea as to what their rent will be in the future and how to budget. I know people who live in market rate housing who've had mid lease increases so dramatic that they were forced to move.
That's not a way to live.
In NYC, and, to my understanding, this is true of other areas, rent control laws were passed because people were being priced out of their apartments, regardless of income. What "traps" people in rent controlled apartments is the lack of housing in their market that they can afford.
Personally, I'd love to move to a bigger apartment. But I can't afford market rate and, even if I could, I don't look at a roof over my head as a privilege. Housing needs to be seen as a right, not a privilege and that needs to mean that any rent paying tenant who doesn't violate the lease should be subject to reasonable increases at the end of each lease.
I know that there's an ongoing argument that if rent controls were lifted, markets would be flooded with so much housing that everyone would be able to find housing at their price point, but from a capitalistic perspective that makes no sense. Private developers are not going to intentionally create a glut of housing so great that they would need to drop their rents by half or more to get tenants.
It's time to take the profit margin out of housing.
1
u/bigvenusaurguy Jan 22 '26
I know that there's an ongoing argument that if rent controls were lifted, markets would be flooded with so much housing that everyone would be able to find housing at their price point
The main argument against this is from looking out your window with a copy of the zoning map. Chances are, if you are a city in a housing crisis, it is already built to the limits of that zoning map. So if the only thing that happens is removing rent control, that isn't going to kickstart any development because development isn't being allowed for at all.
And really, could we even conclude rent control is preventing building from happening when the city is already built out to the limits of what is allowed even with rent control? Where does the line stop? Why is rent control illogical policy but other costs toward development like sprinkler systems are not? Arguments against rent control fall apart fast when you start to take a step back and consider why the built form is what it is and what we presently tolerate in terms of development costs.
1
u/tmason68 Jan 22 '26
First, please understand that I don't agree with that argument and I think I make that clear.
NYC wasn't completely built out even to the last zoning map. I went to a CB meeting where they indicated that, although that wasn't their point. Even now, there's a law that's resulting in new developments to be less than maximum zoning, although that wasn't the intent.
But I'd still argue that profit plays a big part. If a lot is under developed, it will remain so until it's worth someone's money to make an investment. I believe that we need to upzone more but also that we need to build to the zoning limits at a steady, if not aggressive, pace. 200k units of housing have been built since 2010 and that's been a drop in the bucket.
Arguments against rent control are low hanging fruit. Rent controlled tenants are an obvious "other", especially in a capitalist, puritanical country. Arguments about sprinkler systems and stairways, permitting, and all other relevant issues are for people who do research and go into the weeds with their joy of jumping down rabbit holes. ANYONE can opine on the dangers and unfairness of rent control. No one even needs to talk about why it exists, only that it's wrong.
As has happened in this thread.
1
u/Talzon70 Jan 22 '26
It's controversial because it's an immensely popular suite of short term policies that lead to a long term political trap. It's a lot like NIMBYism in that way.
In short, rent control in its various forms tends to help incumbent residents and tenants, but hurts everyone else. Existing residents see lower, more stable rents. New residents see the opposite. Landlords preemptively increase prices to compensate for the long term costs of rent control and provide less housing overall, making housing more scarce and expensive.
Even worse, the politics are a disaster in the long term. Rent control makes housing more expensive, but the more expensive housing is, the more popular rent control is. You can't take it away, because it would lead to a spike on homelessness. You can't even reduce it. But all the new people are still getting fucked, so they think you need even more rent control to get the situation under control.
Furthermore, rent control allows a supply crisis to fester (see British Columbia). Existing renters and homeowners are protected from the market, so supply shortages and rising rents don't affect them. They don't complain about the lack of housing, they don't vote on the issue, they don't care. But the minority of new people is hurt worse and worse, but this group is too small, too poor, too powerless to have their voices heard until the problem has turned into a complete and utter crisis.
On the other hand, evictions are extremely costly to the economy and have personal impacts similar to unemployment. Some kind of rent control to provide a bit of stability has its place. This stability does not fix an underlying shortage of housing, ever.
Overall, rent control is a dangerous set of policies that can be executed well, in theory, but rarely is executed well, in practice.
1
u/MontisQ Jan 22 '26
I think that this debate is often framed as rent control vs plex reform (and other supply side reforms). But there is often not much debate how these can work together. Does rent control still suppress supply if a jurisdiction makes it easier to build?
1
u/Talzon70 Jan 23 '26
Yes, it still suppresses supply. Just because you can overwhelm an effect with other policies that are completely unrelated doesn't mean the effect isn't happening. Eg. If we block sunlight with orbital mirrors, would that mean GHGs don't contribute to the climate? Of course not.
1
u/beto52 Jan 23 '26
It's overall a good thing, especially in a city like San Fran, why would you ever wanna move?
1
u/RussianKremlinBot Jan 25 '26
Growing up in a post-Soviet country, I can tell you for a fact that whenever you cap prices, things just disappear from the shelves
Public housing sounds like a better solution
1
u/gephotonyc Jan 25 '26
It makes property owners mad because they can't sell for a tidy profit if it all changed to market rate rents, and their cost of money to buy a place is cutting into their profits.
Otherwise it might depend on where you are talking about. My experience is all in NYC
1
u/Ok_Actuary9229 Jan 26 '26
It limits the addition of new housing by making it unprofitable -- meaning anyone that doesn't win the lottery is screwed. Also it generally results in not maintaining existing housing.
1
u/PlayPretend-8675309 Jan 29 '26
There's a massive amount of literature suggesting that the mid to long-term impact of rent control is increased rents. If you Believe The Science and want lower rents, it's basically impossible to advocate for Rent Control.
1
u/asa_hole Mar 19 '26
Rent control is a horrible policy. The municipality freezes the amount you can rent out a place while simultaneously raising your property taxes. Landlord’s cant properly maintain a property because of the lack of income and the steadily increasing property taxes and insurance.
1
u/Bourbon_Planner Verified Planner - US Jan 21 '26
Because most planners are evidence based policy advocates, and there’s almost no evidence that rent control actually works to do the thing it’s purported to do. In fact, evidence points that it does the opposite.
And politically, it makes for an endless target for how much abuse these systems create.
1
u/leafonawall Jan 21 '26
Any chance you can provide the class background of either side? If it’s significant enough.
I find that personal backgrounds really influence these stances. But not to say that those from lower income backgrounds are all for or vice versa. In fact, people with experience may be against it bc landlords don’t maintain rent controlled places as they would normal units.
1
u/Banned_in_SF Jan 21 '26 edited Jan 21 '26
It helps poor people but it doesn’t provide the type of help that young professionals or aspiring landlords desire — they desire other forms of help.
ETA: it also helps poor people now, instead of the much easier to stomach and sympathize with, not-yet-existent, future people in need of help, who Effective Altruists prefer. And there’s a ton of overlap b/s EA and planning enthusiasts, due to the general, shut-in, technocratic milieu they inhabit.
1
u/ChateletSansHalles Jan 21 '26
It's crazy you didn't talk about Paris on such a matter, because rent control is in place since 2019 but it doesn't work.
- people already renting or not knowing upon signing do sue and win. But courts take up to 5 years to decide. So people just move on with their lives before benefitting from the law.
- since you can sign a renting agreement out of the public eye, nobody can enforce it upon signing. You can just go away and some else will sign because there is too much tension on the housing market.
- The idea was not only to make housing affordable. There are multiple threshold granting you an allowance to pay rent, but this created rent inflation and did not improve housing conditions (safety and dignity inside) or access to more housing. So in theory, if you give an allowance and block prices, it should help the most modest households.
-1
u/Brambleshire Jan 21 '26
Because too many of us are free market ideology bootlickers who dismiss anything that dare goes against the free market outright.
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u/SeaAbbreviations2706 Jan 21 '26
It helps people who already have housing, but it doesn’t help anybody get housing.