Fact Check: 32 Economists Distort the Record on Rent Regulations
A recent letter from 32 economists purported to show empirical evidence that rent control is a net positive. These economists come from a variety of disciplines, including political economists and labor economists, but the majority appear to have limited to no experience as housing economists. The National Multifamily Housing Council (NMHC) wholeheartedly agrees that millions of households in this country face a housing affordability crisis, but we cannot let disinformation feed false narratives about decades of fact-based evidence of the negative policy consequences of rent regulations.
Setting the record straight, here are complete conclusions from the very articles cited by the economists that they claim support rent regulations:
- Diamond, McQuade & Qian (2019): "Thus, while rent control prevents displacement of incumbent renters in the short run, the lost rental housing supply likely drove up market rents in the long run, ultimately undermining the goals of the law."
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Munch & Svarer (2002):
"Therefore, it is concluded that rent control has a very unfortunate effect on household mobility and that the efficiency of the housing market is seriously hampered. A perhaps even more serious consequence of reduced mobility in the housing market is the spillover to the labor market." -
Ambrosius et al (2015):
"The intended impacts of New Jersey rent control ordinances over a 40-year period seem minimal when compared to cities without regulations. Housing activists and policymakers need to look at additional kinds of approaches to address the post-crash rental housing affordability crisis." -
Autor, Palmer & Pathak (2014):
"... we conclude that decontrol led to changes in the attributes of Cambridge residents and the production of other localized amenities that made Cambridge a more desirable place to live." - To help combat the country's housing affordability challenges, what do the academics cited by the authors propose? From Diamond, McQuade & Qian (2019): "These results highlight that forcing landlords to provide insurance against rent increases can ultimately be counterproductive. If society desires to provide social insurance against rent increases, it may be less distortionary to offer this subsidy in the form of government subsidies or tax credits. This would remove landlords' incentives to decrease the housing supply and could provide households with the insurance they desire."
It's unfortunate to see fear and ignorance driving counter-productive policies like rent regulations when there are proven solutions to solving the affordability crisis. Read more about real solutions here.
Read the NMHC annotated letter here and the actual literature here.
Based in Washington, D.C., the National Multifamily Housing Council (NMHC) is the leadership of the apartment industry. We bring together the prominent owners, managers and developers who help create thriving communities by providing apartment homes for 38.9 million Americans, contributing $3.4 trillion annually to the economy. NMHC provides a forum for insight, advocacy and action that enables both members and the communities they help build to thrive. For more information, contact NMHC at 202/974-2300, e-mail the Council at [email protected], or visit NMHC's website at www.nmhc.org.
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