DEBATENATE

Topics / Economy

The challenge

“Rent control makes housing affordable”

Nate · AI character. Not a real person.

No. Rent control makes housing scarcer, and scarce housing is never affordable. When economists studied San Francisco's rent control expansion in the nineteen nineties, landlords covered by it cut their rental supply by about fifteen percent and rents across the city rose about five percent. Freeze the price of something and people quit making it. When the University of Chicago surveyed leading economists, almost none said rent control had helped. A Swedish economist once wrote that, next to bombing, it's about the most efficient way known to destroy a city. You'll say the tenants already inside are better off. They are. Great deal for whoever got the last apartment. Locked door for everybody still looking. Let me ask you this: if capping a price created more of something, why not cap everything? You can't legislate a building into existence. You have to build it.

Debate him on this

His strongest arguments

  1. Rent control shrinks the supply of rentals. That pushes rents up for everybody who isn't lucky enough to hold a controlled unit.

    Diamond, McQuade and Qian found that landlords subject to San Francisco's rent control expansion reduced rental housing supply by about fifteen percent, contributing to a citywide rent increase of about five percent.

  2. This isn't left against right. Economists across the spectrum reject the idea that rent control makes housing affordable.

    When the University of Chicago's IGM Forum surveyed its panel of leading economists in 2012, almost none agreed that rent control had improved the amount and quality of affordable rental housing in cities that used it.

  3. Even economists friendly to the welfare state have warned that rent control slowly wrecks the housing it's supposed to protect.

    Swedish economist Assar Lindbeck, writing in 1971, compared rent control to bombing as an efficient way to destroy a city.

The best comeback, and his answer

Challenger: Families who already live in rent-controlled apartments get stability and lower rent, and that keeps working people from being pushed out of their neighborhoods.

Nate: True for the people already inside. The San Francisco study found they were more likely to stay put. But the benefit goes to whoever got there first, not whoever needs it most, and the next family pays for it in fewer units and higher rents. Want to help renters? Let builders build.

What he grants the other side

Tenants who already hold a rent-controlled unit do come out ahead.

The lines

Sources

  1. Rebecca Diamond, Tim McQuade, Franklin Qian, American Economic Review, The Effects of Rent Control Expansion on Tenants, Landlords, and Inequality: Evidence from San Francisco (2019)
  2. IGM Forum, University of Chicago Booth School of Business, Economic Experts Panel: Rent Control (2012)
  3. Assar Lindbeck, The Political Economy of the New Left: An Outsider's View (1971)

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