Wednesday, March 1, 2017

Panel of 41 U.S. Economic Experts: "Rent Control has Negative Impact on Quality and Quantity of Affordable Housing"

A panel of 41 economists from across the U.S. assembled as part of the Initiative on Global Markets at the University of Chicago Booth School of Business say rent control doesn't work.

In survey results posted February 7, 2017, 82% of the panelists disagreed or strongly disagreed with the following statement: "Local ordinances that limit rent increases for some rental housing units, such as in New York and San Francisco, have had a positive impact over the past three decades on the amount and quality of broadly affordable rental housing in cities that have used them."
  • Economist David Autor, associate head of the MIT department of economics, said "Rent control discourages supply of rental units. Incumbent renters benefit from capped prices. New renters face reduced rental options."
  • Economist Judith Chevalier of Yale, former editor of the American Economic Review, wrote "Rent control will have similar effects to any price control."
  • Economist Aaron Edlin of Berkeley wrote: "Rent control lowers incentives to invest and increases incentives to hold underoccupied rentals."
  • Economist Michael Greenstone, former Chief Economist for the Council of Economic Advisers, in Chicago wrote: "Great if you are lucky enough to get one of those apartments! Bad for all others. The worst policies apply to new construction."
  • Economist Caroline Hoxby, director of the economics education program at Stanford wrote: "Rent controlled units do not end up in the hands of low-income people. Rent control discourages landlords from creating modest priced units."
  • Economist Edward Lazear, of Stanford and chair of the President's Council of Economic Advisers (2006-2009), wrote: "Even in the short run, rent control induces owners to move property to other uses, misallocate the property, and substitute non-price allocations."
  • Economist Cecilia Rouse of Princeton and former member of the President's Council of Economic Advisers (2009-2011) wrote: "While well intended, theoretically they also likely limit expansions in supply and improvements in quality."
  • Economist Nancy Stokey of Chicago and former Editor of the Journal of Political Economy (2003-2007) wrote: "The planets are lined up here: theory and evidence point in the same direction."

See more details on the question and results, and learn more about the Initiative on Global Markets by clicking here.