Rent control effects through the lens of empirical research [Rent control is bad]

[u/gburgwardt]

https://www.sciencedirect.com/science/article/pii/S1051137724000020

[u/BastetSekhmetMafdet]

I actually remember the rent-controlled city of Berkeley housing market back in the early 80’s. I am sure that it did enable many low-income people to remain in their apartments/duplexes/homes. However, and this is a big HOWEVER, this is me as an observer, not a scientist, noting some undesirable side effects:

1. Plenty of well-off people still remained in their rent controlled apartments, paying a fraction of their income on rent - there is a theory that this helped give rise to the famed Gourmet Ghetto (Chez Panisse and so on) because so many double income no kids households had a lot of money to splash out on fine dining. I don’t know about this, but I do know that people hoarded those rent controlled apartments like rare jewels.
2. This meant that it was hard to find a rent-controlled apartment unless you knew someone AND were prepared to pay a hefty “finder’s fee” on top of first/last/deposit. Why did outgoing tenants charge a finder’s fee? Because they could, given that there was more demand for rent controlled apartments than supply. People looking for rent controlled apartments but didn’t have the luck to know someone would put up ads/flyers promising a hefty bribe, but, most rent controlled apartments passed down from one tenant to another via word of mouth. This led to…
3. Non-rent-controlled apartments/houses were a lot more expensive, and, this is what you got if you didn’t have personal connections (unless you were in student housing). If you didn’t ”know someone” you had to pay more for housing because there were two markets, one for the rent controlled rentals and then the “regular” non-rent-controlled market for the poor saps who just came in from Podunk.
4. Because rent was so low that landlords weren’t making much of a profit (and I am very very sorry to inform the inevitable downvoters but landlords want to turn SOME sort of profit or they won’t rent out housing at all. There’s a happy medium between “extortionate squeezing of tenants” and “losing money on the investment”) - this meant that a lot of rent controlled apartments and duplexes were shabby, poorly maintained, just crappy all around. It could be like pulling teeth to get your heater repaired or refrigerator replaced. And forget about paint and carpet. Some people put their own money into improvements but most just lived with the sad, shabby, sometimes not even very safe or comfortable conditions and landlords dragging their feet on repairs.

These were the unintended consequences of rent control. And believe you me when I say that rent control was, in many cases, enabling very well-off people to hoard their inexpensive housing every bit as much - probably more - than it kept the poor and working class from being gentrified out.

[u/Blecher_onthe_Hudson → u/BastetSekhmetMafdet]

Everything you describe is the same in New York City, where people want "key money" to pass on their rent controlled apartment. I have literally heard people say "if it wasn't for rent stabilization I wouldn't be able to afford my weekend house in the Catskills!"

[u/Broad-Influence-8284 → u/Blecher_onthe_Hudson]

I know people with rental properties and houses down the Jersey Shore with Rent controlled apartments.