Rent Control’s Potential and Devastating Effects
We’ve covered this issue quite a bit over the past couple years. Now comes a new report from the National Apartment Association (NAA) that illustrates rent control’s potentially devastating effects on four major U.S. cities (Chicago, Denver, Portland Oregon, and Seattle). The NAA’s analysis hows these policies decrease housing supply, harm the condition of existing housing stock and lower property values (lowering tax revenues), limiting job growth and having a negative impact on local economies. Indeed…
“Each of these effects represent inefficient outcomes relative to allowing the market price to adjust according to supply and demand. By not allowing the market for dwellings to function properly, rent control changes the allocation of housing investment across space. Under normal conditions, rising rent levels would be met with increased building in an area, curbing long-term growth in rents. However, rent control blunts the price mechanism, causing a misallocation of housing investment both within and across metropolitan areas.”
Click here to read the full report at the National Apartments Association.
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