Is Rent Control a Necessary "Evil"?

[Chris Levarek]

Three states passed state-wide rent control laws in 2019, California, Oregon and New York. Other cities such as New York, San Francisco and Washington D.C. have had rent control policies in place for decades.

"Over the long term, rent control tends to restrain multifamily housing development, exacerbating local housing shortages and adding upward momentum to owner-occupied home prices." according to Marcus & Millichap Investment Forecast for 2020. 

Given the impact rent control can have on new investments and investor interests, is it a necessary "evil" to protect the interests of the current renter base or is it causing more harm then good?

Thoughts?

[Russell Brazil]

"The analysis of rent control is among the best-understood issues in all of economics, and -- among economists, anyway -- one of the least controversial.... a poll of the American Economic Association found 93 percent of its members agreeing that ''a ceiling on rents reduces the quality and quantity of housing.'' Almost every freshman-level textbook contains a case study on rent control, using its known adverse side effects to illustrate the principles of supply and demand. Sky-high rents on uncontrolled apartments, because desperate renters have nowhere to go -- and the absence of new apartment construction, despite those high rents, because landlords fear that controls will be extended? Predictable. Bitter relations between tenants and landlords, with an arms race between ever-more ingenious strategies to force tenants out -- what yesterday's article oddly described as ''free-market horror stories'' -- and constantly proliferating regulations designed to block those strategies? Predictable." - Paul Krugman.

Rent control simply does not help anyone but a tiny fraction of renters. It hurts however 100s of times more renters than it helps. Rent control leads to housing shortages. Rent control creates ghettos. Rent control causes rents to skyrocket. Im sure someone will come on here and try to defend it, but as Krugman insinuates, anyone who does does not even lack a year 1 college education in basic economics.