Rent control primarily benefits long-term, established tenants in high-cost housing markets. By capping rent increases, it protects them from sudden price hikes and displacement. These benefits, however, often come at the expense of new renters, who face a reduced supply of available, unrestricted housing.
The distribution of rent-control benefits/drawbacks is highly specific in these three groups:
■ Long-term tenants: These renters gain the most. They avoid displacement, are able to stay connected to their communities (jobs, schools, social networks) and save substantial money over time.
■ Those in older demographics and vulnerable groups: these benefits are often highly concentrated among older adults, lower-income households and minority groups who face greater displacement pressures.
■ New residents, younger workers and prospective movers: These groups are often at a disadvantage. Because rent control can disincentivize new development or lead landlords to convert rental units to condos, the overall supply of rental housing can shrink, driving up the cost of unregulated apartments.
Landlords also have long-term drawbacks such as capped profitability, deferred maintenance and decreased property values. Rent-controlled properties typically appraise at significantly lower values than identical unregulated units. Corporations that own properties also face heavy overhead and operational expenses that prevent them from keeping all the rent they collect. Where does the money go? Property taxes, insurance, maintenance, turnover and financing costs.
While rent control protects current tenants from price hikes it can make worse the broader housing crisis it aims to fix.
