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and 16% for black renters; affluent renters received a 39% discount.42 The city’s rent-control and rent-stabilization laws have apparently induced landlords to favor older tenants and smaller households (primarily those without children), and rent control’s benefits are similarly biased against young people and larger families.43
Does rent control preserve, or increase, a city’s socioeconomic diversity? Not according to the evidence.44 While it existed, rent control in Cambridge modestly increased the share of minority residents in the city—but economic segregation rose as the share of very low-income residents fell.45 Poor residents can benefit from rent control, but so can higher- income households, especially in the absence of income targeting—as is the case in New York City, where a renter’s offspring can inherit a rent-controlled apartment regardless of income.46 Nearly a third of rent-controlled units in metro Boston were found to be occupied by tenants in the top half of earners.47 Further, navigating lengthy waiting lists and murky black markets requires long wait times and personal connections. That means that newcomers and recent immigrants are often shut out of more affordable housing options—increasing economic, social, and racial segregation.48
Rent Control Degrades the Quality of Tenant Housing
Rent control leaves owners with a limited ability to recoup operational costs and investments through rents or an appreciation of their building’s value. As a result, the quality of rent-controlled housing generally decays through a lack
of investment in maintenance and improvements until it reaches a level supported by the below-market rents.49 Rent-controlled buildings in Cambridge, Massachusetts, were found to be “older, in worse condition, and more in need of very essential repairs.”50 Controlled properties were shown to lower the amenity value and desirability of their surrounding neighborhoods.51 But the overall value of Cambridge’s housing stock increased dramatically in the decade after rent control was abolished in 2004.52 Property investments—dollars that flowed through neighborhoods both wealthy and modest—rose 20% over what would have been the case under rent control and led to major improvements in housing quality.53
Rent control also reduces a city’s tax revenue. Because price controls limit investment return and building quality, the assessed value of rent-controlled properties tends to decline and lower property-tax revenue.54 And since these effects also lower the market value on non-rent-controlled properties, the local property-tax impact is magnified even more—costing up to 20% of the annual property-tax revenue in 1980s Cambridge55 and in New York City more than double its spending on parks and recreation during the same era.56 Income-tax revenue may also decline as landlords receive less rental income, offset only by fewer expenses because of a lack of property investment in a less valuable real-estate market.57 As rent control suppresses housing construction and maintenance, its effects ripple outward to suppress economic activity and job creation from the construction and rehabilitation trades.
 The author, Michael Hendrix, is a senior fellow and director of state and local policy at the Manhattan Institute. Previously, he served as senior director for research and emerging issues at the U.S. Chamber of Commerce Foundation. He is a frequent public speaker, and his writings have appeared in, among others, National Review, City Journal, and National Affairs. He holds an M.A. in international relations from the University of St. Andrews (Scotland), as well as a certificate in strategy and performance management from Georgetown University. The Manhattan Institute is a think tank whose mission is to develop and disseminate new ideas that foster greater economic choice and individual responsibility. For more information and to donate, go to: This article has been reprinted with permission of the Manhattan Institute and was first published by City Journal.
  26. David P. Sims, “Out of Control: What Can We Learn from the End of Massachusetts Rent Control?” Journal of Urban Economics 61, no. 1 (January 2007): 129–51.
27. Diamond, McQuade, and Qian, “The Effects of Rent Control Expansion.”
28. Edgar O. Olsen, “An Econometric Analysis of Rent Control,” Journal of Political Economy 80, no. 6 (November–December 1972: 1081–1100; Joseph Gyourko and Peter Linneman, “Equity and Efficiency Aspects of Rent Control: An Empirical Study of New York City,” Journal of Urban Economics 26, no. 1 (July 1989): 54–74.
29. Sims, “Out of Control”; Jeremy Bulow and Paul Klemperer, “Regulated Prices, Rent Seeking, and Consumer Surplus,” Journal of Political Economy 120, no. 1 (February 2012): 160–86.
30. Edward L. Glaeser and Erzo F. P. Luttmer, “The Misallocation of Housing Under Rent Control,” NBER working paper 6220, October 1997.
31. Bulow and Klemperer, “Regulated Prices, Rent Seeking, and Consumer Surplus,” 178.
32. [1] Maddy Savage, “The City with 20-Year Waiting Lists for Rental Homes,” BBC, May 17,
33. Alex Tabarrok, “Rent Control in Stockholm,” Marginal Revolution, July 24, 2015.
34. David Crouch, “Pitfalls of Rent Restraints: Why Stockholm’s Model Has Failed Many,” The
Guardian, Aug. 19, 2015.
35. Stephen J. Dubner, “Why Rent Control Doesn’t Work,” Freakonomics, Episode 373 (podcast),
Apr. 3, 2019; Nikkita Dixon, “Why Stockholm’s Rental Black Market Is Here to Stay,” treromog-, Dec. 11, 2017.
36. Diamond, McQuade, and Qian, “The Effects of Rent Control Expansion.”
37. Rebecca Diamond, “What Does Economic Evidence Tell Us About the Effects of Rent Con-
trol?” Brookings Institution, Oct. 18, 2018.
38. Richard Ault and Richard Saba, “The Economic Effects of Long-Term Rent Control: The Case
of New York City,” Journal of Real Estate Finance and Economics 3, no. 1 (March 1990): 25–41.
39. Lisa Sturtevant, “The Impacts of Rent Control: A Research Review and Synthesis,” NMHC
Research Foundation, May 2018.
40. Gyourko and Linneman, “Equity and Efficiency Aspects of Rent Control.”
41. Henry O. Pollakowski, “Rent Control and Housing Investment: Evidence from Deregulation in Cambridge, Massachusetts,” Manhattan Institute, May 1, 2003.
42. Josh Barbanel, “Wealthy, Older Tenants in Manhattan Get Biggest Boost from Rent Regula- tions,” Wall Street Journal, June 12, 2019.
43. Early, “Rent Control, Rental Housing Supply, and the Distribution of Tenant Benefits,” 202:
“It is plausible that controlled units are rationed. If landlords believe that larger households headed by young persons lead to quicker depreciation of their units, the rationing of units by landlords would lower the probability of larger and younger households finding rent regulated units.” See also Diamond “Tenants, Landlords, and Inequality.”
44. Sturtevant, “The Impacts of Rent Control.”
45. Sims, “Out of Control.”
46. Joshua Stein, “How to Kill a Housing Market,” Wall Street Journal, Sept. 27, 2019.
47. Sims, “Out of Control.”
48. Crouch, “Pitfalls of Rent Restraints.”
49. Sims, “Out of Control.”
50. Pollakowski, “Rent Control and Housing Investment.”
51. Autor, Palmer, and Pathak, “Housing Market Spillovers.”
52. Ibid., 31, estimates the increased value of the city’s housing stock in the decade after 1994 to
be $1.8 billion. Diamond, “What Does Economic Evidence Tell Us About the Effects of Rent
Control?” pegs it at $2.0 billion.
53. Pollakowski, “Rent Control and Housing Investment.”
54. Diamond, “What Does Economic Evidence Tell Us About the Effects of Rent Control?”
55. Navarro, “Rent Control in Cambridge, Mass.”
56. Peat Marwick Main & Co., A Financial Analysis of Rent Regulation in New York City: Costs
and Opportunities: Final Report to the Rent Stabilization Association of New York City, Inc. (New York: The Firm, 1988); Independent Budget Office of the City of New York, “Fiscal His- tory: Agency Expenditures.”
57. “A.G. File No. 2019-001,” Rent Control [Ballot], June 10, 2019.

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