The Negative Impact of Rent Controls?

[Sean Dezoysa]

Hi, I was recently talking to a liberal friend about how rent controls actually cause more housing shortages because they decrease the incentive for builders to build or redevelop. My friend then asked what negative impacts there would be in a city where it is already unfeasible to build or redevelop, such as New York City. I wasn't sure, but I told him I thought that it would slow down the gentrification process, because a low wage earner paying 50% of what he should be paying i rent is occupying a space that would go to a higher earning professional if there were no rent controls in place.

This is not a topic I know a lot about, so can someone answer what the real reason is for the problems that Brett controls cost in extremely expensive areas like New York City?