Some U.S. cities are evaluating or implementing new rent control regulations to curtail rapidly-rising rising rents and worsening rental affordability. For example, in just the past few weeks, rent control policy has garnered headlines in New York City, where the Rent Guidelines Board voted to freeze rents for a year on roughly 1 million regulated units citywide, and in Seattle, where a proposal has been made to incentivize private landlords to cap rents in exchange for property tax exemptions.
As part of the most recent quarterly installment of its Home Price Expectations Survey, Zillow asked the Pulsenomics expert panel of economists, investment strategists and housing market mavens to weigh-in on the topic. Here’s the breakdown of responses we received:
Most respondents believe that rent control, however well-meaning, ultimately hurts more lower-income residents in the long run than it helps in the near term. A follow-up survey question probed the panel re: how rent control impacts affected properties and local markets:
A 1990 survey asked 1,350 U.S. economists about their views on 40 different statements about economic policies and theories. Of the 40, the greatest consensus formed on the topic of rent control. Ninety-three percent of the 464 survey respondents indicated agreement, or qualified agreement, with this statement: “A ceiling on rents reduces the quantity and quality of housing available.”
So, a quarter century later–and despite record-high inflation-adjusted rents in many U.S. cities–a significant majority of economists and other housing market experts still view rent control to be counter-productive.
As we near the fifth anniversary of the 2010 New York gubernatorial election– when Jimmy McMillan last ran as a candidate for public office representing the “Rent is Too Damn High” party–median rents in The Big Apple and other cities are even higher relative to median incomes. But the cost of the unintended consequences of government-imposed price controls is too damn high–even relative to sky-high rents.