Resources

Click the tabs below to read press clips and examine studies on rent control.

Rent Control Debate Fuels Uncertainty In Prince George’s County’s Multifamily Market

"There’s been more concern and reluctancy from private capital and institutional investors to invest in [Prince George’s County]…To illustrate this concern, [Transwestern] pointed to a 97% decrease in transaction sales between [2023] and [2022]. There were 20 sales totaling $1.3B in the county [in 2022]. So far this year, there have been only two for a total of $35M."

Why this matters: Institutions and investors are pulling back from purchasing real estate in the County at an alarming rate, resulting in millions of dollars of lost transfer and recordation tax revenue. This is a critical funding source the County relies on to fund major capital improvement projects, such as schools, roads, and other infrastructure.

How to Kill New York’s Rental Housing Market

“Rent increases on nearly half of New York City’s rental housing stock are already capped, which is a disincentive for landlords to invest in maintenance and improvements. Tenants in rent-regulated units are roughly twice as likely to complain about rodents, heating breakdowns, mold and peeling paint as those in market-rate units. Landlords used to be allowed to “de-regulate” units when tenants moved out and the rent exceeded $2,800 a month. The 2019 law bars them from doing so and limits rent increases to pay for renovations.”

One predictable result [of rent control] is that multifamily housing values and investment have plunged. The Federal Deposit Insurance Corp. unloaded loans by failed Signature Bank that were backed by New York rent-regulated buildings at a roughly 40% discount. New York Community Bancorp warned this year that 14% of its rent-regulated loan book was at risk of default. Worries about its heavy exposure to the city’s rent-regulated multifamily housing caused its stock to plunge. 

Why this matters: Rent controlled units are more likely to have housing quality issues than market-rate units, as rents cannot be raised to cover spikes in operating expenses. Rent Control results in massive commercial property value declines, meaning less revenue for county schools, public safety, and other programs.

Killing the city’s housing stock: another progressive ‘victory’

"The New York State Legislature passed the Housing Stability and Tenant Protections Act of 2019. This led to a $71 million decrease in rent controlled housing the following year."

Why this matters: New York’s Housing Stability and Tenant Protection Act was a vast expansion of rent control that limited how much rent could be increased upon vacancy after renovations. Spending on renovations has decreased substantially, harming housing quality in New York City.

High Vacancy in Rent-Controlled Units NYC Owners Can't Repair

"The Real Estate Board of New York commissioned a study that found that the Housing Stability and Tenant Protections Act has made it more difficult to put rent-controlled units back on the market once they become vacant. Small property owners were found to have higher vacancy rates due to “economic infeasibility of unit improvements” at the end of a long tenancy."

Why this matters: Rent control makes it harder renovate when renters move out after many years, harming housing quality and resulting in fewer apartments available for rent.

Towson University Regional Economic Studies Institute: Economic and Fiscal Impacts of Rent Control Legislation in Montgomery County, Maryland (2015)

Towson University’s Regional Economic Studies Institute estimated in 2015 that implementing rent control in Montgomery County, MD would result in severe negative economic and fiscal impacts, especially on development of mixed-use projects.

"The relevant current pipeline mixed-use projects total 5.3 million square feet in non-residential space. The loss of this square footage would equal a loss of 975 construction jobs and an additional loss of 1,722 jobs from subsequent economic activity associated with these mixed used spaces over the next ten years.

It is important to note that these estimates are conservative as they do not take into account the impact on additional proposed construction projects that rely on these multifamily dwellings being developed. Examples include new shopping centers, restaurants, or other businesses not directly associated with the mixed used developments analyzed in this section."

Regional Economic Consulting Group: Economic Impact Analysis of Rent Control (2023)

This 2023 economic impact analysis of rent control implementation estimates 20,259 jobs lost, $1.3 billion in lost tax revenue, and $4.2 Billion in lost economic output in the Washington Metropolitan Statistical Area.

Robbing Peter to Pay Paul? The Redistribution of Wealth Caused by Rent Control (2022)

Using census data from property addresses, the study found the following:

Rent control caused property values to decline by 6-7%;
Tenants who gained the most benefits from rent control had higher incomes and were more likely to be white, while the owners of rental housing who lost the most wealth had lower incomes and were more likely to be minorities;
For properties with high-income owners and low-income tenants, the transfer of wealth was close to zero.

Thus, to the extent that rent control is intended to transfer wealth from high-income to low-income households, the realized impact of the law was the opposite of its intention.

Research Examines the Impacts of Rent Regulation and Implications for Inequality (2022)

Evaluating New York City’s longstanding rent stabilization policy, economists at Johns Hopkins University found that it has failed to produce the intended results. “Despite rent regulation being frequently promoted as an effective tool for housing affordability and achieving equality and social justice, we find that rent discounts are not progressively distributed. In other words, people with lower incomes do not get larger rent discounts. And many with high incomes get very sizable discounts.”
 
The study attributes this in part to larger market rent increases falling on those properties and communities that serve higher income populations. Therefore, they benefit the most from rent controls. Conversely, properties and communities serving lower-income and minority populations benefit the least. This serves to perpetuate rather than address wealth gaps among classes.  
 
The unequal access to rent-controlled units also favors traditionally privileged groups, creating a particular problem for jurisdictions dealing with gentrification and displacement. The study found that access to and benefits of rent control are unevenly distributed across racial groups. Black tenants, for example, are 5% less likely to occupy a rent-stabilized unit than white tenants even after controlling for education, household size, and income.

St. Louis Fed: What are the Long-run Trade-offs of Rent Control Policies? (2024)

According to the St. Louis Federal Reserve, despite modification to traditional rent control policies to try and blunt effects on housing supply and quality, these policies still result in worse housing quality and availability.

"Despite innovations to rent-control laws meant to maintain the housing supply, economists have found that following the introduction of these policies, rental stock typically declines through channels like the conversion of rental units to owner-occupied units and major unit renovations. In the long run, such policies may lead to a permanent change in the housing supply mix, which could also make renting less affordable.

Rent-control policies can have other downsides beyond dampening the growth of rental housing stock. Several economists found negative effects on housing quality; their studies show rent-controlled buildings or areas with large concentrations of rent-controlled units tend to have more dilapidated units, suggesting that rent control reduces landlords’ incentives to maintain their units."

The Effects of Rent Control Expansion on Tenants, Landlords, and Inequality: Evidence from San Francisco (2019)

After a 1994 policy change expanding rent control in San Francisco, researchers found that rent control limits renter mobility by 20 percent and overall housing supply reduced by 15 percent, leading to higher market rents. In addition, researchers also found that "the average tenant treated by rent control lives in a census tract with worse observable amenities, as measured by the census tract’s median household income, share of the population with a college degree, median house value, and share unemployed."