Friday, December 27, 2019

Washington Post: "The economists are right: Rent control is bad"

Wow, as the year ends, some serious progress in the form of sound basic economics out of the Washington Post:

From the Editorial Board:
RENT CONTROL is back. Economists have long criticized government price controls on apartments, a concept that had its first moment in the 1920s and that some cities reintroduced in a modified form in the 1970s. Now, decades later, California and Oregon are moving forward with statewide rent-control laws. Meanwhile, presidential candidate Sen. Bernie Sanders (I-Vt.) has made a national rent-control standard the centerpiece of his sprawling new housing plan.
The economists are right, and the populists are wrong. Rent-control laws can be good for some privileged beneficiaries, who are often not the people who really need help. But they are bad for many others...
Research also indicates that landlords have less incentive to maintain their properties in a rent-controlled environment. Governments can impose maintenance requirements on landlords — but they are tough to enforce. Depending on how the policy is designed, stiff rent-control policies with few exceptions could also discourage investors from building new homes, which would also constrain rental unit supply. And since rent-stabilization policies often tend to discourage people from moving, they harm worker mobility and the economic dynamism associated with it.
 I mean they sound like F.A. Hayek and Walter Block  (See: Rent Control: Myths and Realities--International Evidence of the Effects of Rent Control in Six Countries).

“In many cases, rent control appears to be the most efficient technique presently known to destroy a city—except for bombing.”--Swedish economist Assar Lindbeck.



  1. Every now and then the truth comes out

  2. "Research also indicates that landlords have less incentive to maintain their properties in a rent-controlled environment."

    -- This reveals an empirical mindset, which is what retards progress in economic education. We don't need to wait for a preponderance of studies to form a conclusion; we can just apply sound economic theory to conclude that incentives matter. It's a pity that epistemology is not part of economics courses.