Why I Oppose Rent Control

I believe housing is a human right, and that we are facing a housing crisis that will impoverish a generation if we do not act quickly and aggressively.  I would support nearly any policy that would increase access to affordable housing, reduce the number of rent-burdened households, and reduce or eliminate displacement.  

But I am desperately opposed to rent control.  Rent control laws do not work to make housing affordable for everyone.  In the long run, everyone is worse off under rent control, because rent control is a cruel bargain; stability and subsidies for some renters in exchange for the exclusion and exploitation of others.  

I believe in something different.  I believe we can build enough housing to make it affordable for all, and that we can organize the political will to fund social and public and subsidized housing to help those the market cannot.  I know we can do this because we have done it before.  But even if you disagree with those remedies to our housing crisis, rent control is no answer.  

Let’s take a moment to acknowledge that no matter where a person stands on the issue of rent control they have likely come to that position out of a desire to make housing more affordable for everyone, and especially for renters.  Neither supporting nor opposing rent control means you care more or less about the critical issue of affordable housing and those it affects.  

Because we all care so deeply about this issue we should ground our discussion in the extensive body of empirical research on this topic.  Being concerned about potential illness is not evidence in support of vaccinations; the fact that vaccines can and do measurably prevent illness is.  Likewise, concerns about displacement or increasing rents are not evidence in support of rent control; only evidence that displacement is reduced or rents are more affordable means we should support rent control.  If we are to prioritize renters and those who are desperate to work their way into becoming renters it means we can’t give weight to arguments about giveaways to landlords or to the ideological evils of capitalism, because those arguments say nothing about the harms and benefits to renters directly.  The rent won’t wait for a revolution. The only question before us is whether renters are better off in measurable ways with rent control than they are without.   

What Is Rent Control?

Rent control is a law or set of laws that sets rent levels or controls the amount and frequency of rent increases through regulation.  From their introduction in Europe after World War I, where rents were frozen at certain levels, to second generation rent control laws enacted in the United States in the 1970s, where rents are allowed to increase at certain rate or by reference to external factors such as inflation, rent control is one of the most studied issues in economics.  

Arguably, inclusionary zoning is also a form of rent control.  Inclusionary zoning is a mandate that new developments set aside a number of units to be rented at certain rates.  Many of the same shortcomings of rent control apply to inclusionary zoning.  

Note: The studies cited throughout are generally the most recent or highest quality I could find, and very representative of research on rent control generally.  For further reading, check out this literature review.

What Are the Effects of Rent Control?

  1.   Reduced Supply of Rental Housing

Rent control incentivizes landlords to convert property away from rental housing (because they aren’t making as much money under rent control) either by making the units condos or by moving into the units themselves.  In San Francisco, the cumulative effect of the imposition of rent control in 1994 was to reduce the supply of available rental housing by 15%, reduce the number of renters in buildings subject to rent control under the 1994 law by 20%, and reduce the number of renters in all rent controlled buildings by 30%.  Rent control is an effective strategy if your goal is to reduce rental housing and drive renters out of a city, but it’s far more pro-renter to encourage an abundance of rental housing.

  1. Existing Rental Properties Redeveloped for Higher Income Renters

If landlords don’t want to convert the property away from rental status but do still want to increase their incomes from the properties, they often can evade rent control requirements by renovating the properties.  Because many rent control policies exclude new developments or redeveloped properties (to mitigate the supply-restricting effects of rent control) landlords can increase their income by renovating properties and then raising rents.  Along with condo conversions and increased owner occupancy these renovations increased the housing available for higher income individuals at the expense of lower income individuals, especially in pricier neighborhoods.  The shorter version: rent control gentrifies, the opposite effect many rent control advocates hope for in pushing rent control.

  1. Incumbent Renters in Rent-Controlled Units Receive Monetary Benefits

Those lucky enough to get a rent controlled unit receive large benefits from the protections.  In San Francisco, those in rent controlled units received between $2,300 and $6,600 a year in benefits between 1995 and 2012, including protections against rent increases, direct transfers from landlords, and lower moving costs.  Overall, the benefits of rent control to incumbent renters was $7.1 billion.  

    4.  Renters in Uncontrolled Units Pay Higher Rents

As rent control decreases housing supply it increases rents.  The recent study from San Francisco shows that the six percent decrease in the supply of available rental housing increased rents in the uncontrolled sector by seven percent.  From 1994 to 2012, the cumulative loss to renters attributable to increased rents under rent control was $5.1 billion.  (Note that this is the loss only to increased rents; increased commuting costs, housing mismatch, the cost to renters not able to move to the city, reduced productivity, etc., are not included in this calculation).  This shows that the benefits of rent control for the lucky renters are offset by losses to other renters who aren’t so lucky.

Maybe this tradeoff is worth it to you, but if you’re a supporter of rent control you should ask yourself if you’re willing to impose a tax on a random selection of renters to subsidize the rents for the remaining renters.  For me, I consider it unconscionable to pit renter against renter; we can and should create enough housing for everyone to have affordable rental housing.  

Of course, at this point an advocate of rent control could argue that the lesson of points three and four is that rent control should be applied to all rental housing.  Unfortunately, expanding rent control to cover all rental housing exacerbates the shortages caused by reduced supply of existing and new rental units discussed in points one and two. With less housing overall under-the-table deals, wait lists, and lack of opportunity to move to the city would become the rule, as in Sweden.

  1. Rental Units Are Mismatched to the Needs of Renters

In college I lived in a one bedroom apartment with three roommates, in law school a two bedroom apartment with one roommate, and now I live in the upper unit of a duplex apartment with my wife and two dogs.  Each of the places I lived was perfect for me at the time, but each was unsuited for my next stage in life.  Looking forward to if and when my wife and I decide to have kids, when we decide to retire, and when we may need assisted living, the homes I imagine us in change based on our needs.  All of our housing needs change over time, but your choices are circumscribed under rent control.  Because rent control increases rents in the uncontrolled sector, those in rent controlled units are less likely to move.  Because rent controlled units are unlikely to come on the market, those in the open market have reduced options.  All this adds up to housing misallocation: people staying in housing they otherwise wouldn’t because of rent control, even if it means longer commutes or overcrowding.  Longer commutes have clear effects on carbon emissions, and space mismatch is a non-monetary cost to rent control for those subject to it.  

  1.   Rent Control doesn’t effectively target people who need help the most.

Ideally, rent controlled units would go to the rent-burdened or those who would otherwise be priced out of the market.  However, the beneficiaries of rent control are very likely to be wealthier households; in Massachusetts, 30% of rent controlled units were occupied by those in the top half of the income distribution.  In weighing the costs and benefits of rent control this windfall for wealthier households counts as a clear cost.  How would you feel if 30% of Section 8 vouchers were going to those in the top half of the income distribution?  (Now imagine the higher income households getting Section 8 vouchers were being funded by low income renters unlucky enough not to win the housing lottery).

Unlike Section 8, which can impose income limits, rent control runs into practical problems with targeting the right beneficiaries.  If landlords are allowed to charge those with higher incomes market rates then landlords will prefer to rent to those with higher incomes, and low income renters will always be last in line for housing.  If landlords are required to rent to those with lower incomes first then they will be aggressive in finding a cause to evict tenants. Imposing rent control means assistance for some renters at the expense of everyone else, with no guarantee that those receiving assistance are those who need it most.  Worse, of those receiving rent controlled units, similarly situated renters do not receive similar benefits. White renters receive larger benefits than similarly situated people of color, and married renters receive larger benefits than similarly situated single renters.  Rent control may be an anti-racial equity policy.


Gunnar Myrdal, a socialist economist and politician who helped build the Swedish welfare state, claimed that, “Rent control has in certain Western countries constituted, maybe, the worst example of poor planning by governments lacking courage and vision.”

Another Swedish socialist, Assar Lindbeck, was even more blunt, saying, ““In many cases rent control appears to be the most efficient technique presently known to destroy a city—except for bombing.”

In the end, rent control succeeds, to the extent that it does, by raising costs for many renters to benefit a random assortment of other renters.  Overall, the costs of rent control exceed the few benefits.  It’s an affordable housing lottery where the ticket is the certainty that if you don’t win, your rent will go up.  Renters deserve better.


Zachary Wefel

About Zachary Wefel

Former candidate for Minneapolis Ward 1 City Council, lawyer at Wefel Law Firm PLLC, and co-founder of the Minnesota Tool Library. Follow me on Twitter @zacharywefel.

31 thoughts on “Why I Oppose Rent Control

  1. Karen

    Thanks, very good break down if the issues with rent control and agree with it all. I will link to this everytime someone suggest rent control as the answer. It’s great.

    I do have a small quibble with this part:

    “Those lucky enough to get a rent controlled unit receive large benefits from the protections. In San Francisco, those in rent controlled units received between $2,300 and $6,600 a year in benefits between 1995 and 2012, including protections against rent increases, direct transfers from landlords, and lower moving costs”

    Since over 60 percent of us are homeowners, I really don’t have a problem some in the other 40 percent, the long-time renters getting some piece of value for sqautting on a property as that is a windfall for homeowners and land owners.

    Of course developers and landlords managing rentals deserve and should be compensated for the valuable parts of their work. However many homeowners and landlords get a big chunk of their appreciation in assets simply by time, increasing populations, and luckily living in right spot. I don’t know why this essentially unearned bonus of time spent in right neighborhood should be limited to just landlords and homeowners and no renters should ever get a piece of this action by picking right neighborhood at right time and staying with it.

    Of course I agree that rent control is not best way to lower rents and produce more, affordable housing options.

    But I a find it sadly amusing that some one that inherited a humble piece of real estate from their parents and did next to nothing to maintain it but made a killing because that neighborhood became popular, gets mad that someone in rent control is stealing from them.

    Like a landlord who makes a million plus a year for part time work, because they’ve held a property long time, paid by people handing over 40 or 50 percent of their earnings, has earned that money so much more than the renter who also got into the neighborhood at the right time.

    Again, I know landlords do a ton of valuable work, but if they hold the land a long time, in most big cities, a big chunk of their rents will be based on land appreciation and tax advantages, not just based the admin and maintenance services they provide, not just on clever development or remodeling.

    1. Zachary WefelZachary Wefel Post author

      Thanks for your feedback! I definitely agree that landowners can bear a greater share of the burden of providing affordable housing. I’d prefer to see a land value tax or a capital gains tax on the sale of property, or both.

    2. Monte Castleman

      How many landlords are given property by their parents and then make a killing on it vs investing their own hard earned money into it and then are just squeaking by or lose their money? My aunt and uncle used to own a half dozen houses and duplexes in North Minneapolis and then exited the business because they both had day jobs and the aggravation of land-lording wasn’t worth the pocket change they were getting. And my stepfather’s father lost close to a million dollars land-lording some downtown apartment buildings.

      1. Karen Nelson

        Income property most cities is far different these days that for our parents and grandparents.

        There was a very long period of time in the last 85 when being a landlord didn’t generally pay very much on appreciation, …now as cities are becoming job concentrators, and more income inequality issues, things have changed.

        I can think of three people I know, here in twin cities that’s the case, and they aren’t in real estate beyond what they got.

  2. Joseph TottenJoseph Totten

    Portland, OR recently passed very low level rent control, with increases in rent limited to 10% per year OR landlords have to assist in moving costs. These are similar to the salary caps of different sports leagues, with the rent control discussed here being a hard cap vs the soft caps similar to Portland’s new measure. Just a discussion of nuances in the debate, I would support a high percent increase limit because it doesn’t seem to be creating those externalities you discuss, but instead sets a limit of reason for increases.

      1. Janne

        This is a good point, that you give up on any measurable positive effects. Assuming that’s accurate over the long term, there seems to be a distinctly positive short-term benefit where there is a cap on the annual rent increase.

        In a current extreme housing shortage where there are instances of 50% increases, a generous (to the landlord) policy wouldn’t harm the market over time, and would provide a meaningful benefit to tenants.

        Given the specific problem named with the Berlin ordinance per your reference, it could exclude luxury apartments, set by a rent affordable at a % above AMI.

        I’m not arguing for rent stabilization, but given the pressure on vulnerable low-income renters, we need short-term protections that do not interfere with long-term solutions. I’m keeping an open mind, and curious about all the options. I hope you’ll share your suggestions for what we DO, as well as what we avoid doing.

        1. Zachary WefelZachary Wefel Post author

          Can you point me to a study or example where rent stabilization has been both effective and does not have supply-suppressing effects in the long run? I’m open to being convinced, but the evidence in favor of rent stabilization is lacking (at best) from everything I’ve read. And, in my experience, when proponents of rent control or rent stabilization are asked to provide evidence supporting their position they tend to dodge the question, so it’s difficult to evaluate whether there is any viable short-term strategy we could actually implement.

          At some point proponents of rent control/stabilization need to step up and offer evidence for their position. Instead, everyone falls back on arguing that the problem is urgent, which is not in dispute among the people having these conversations. The urgency of the problem underlines how important it is to avoid exacerbating it through rent control or feckless alternatives.

          There are plenty of things we can do but this unfortunately is not a problem susceptible to quick solutions. In the short term I would support directing revenues from parking benefit districts, profits from a public bank, and a capital gains tax on the sale of homes to subsidize renters or subsidize new development.

          1. Joseph TottenJoseph Totten

            I think the 10%+CPI change in yearly rent is a high amount to change, and having the penalty being helping the tenants move means that it’s a weak enough ordinance it likely won’t further suppress supply, but also will allow for a low level of certainty for renters.

            I agree that it is more value signalling than anything else, but it still is worthwhile to know my rent won’t be going up hundreds of dollars a month with only 90 days notice (or whenever your renewal period is).

            1. Zachary WefelZachary Wefel Post author

              I’d have a real hard time pushing a policy I know will be ineffective. Plus, there is evidence that landlords will just charge a higher rent up front to compensate for being limited in their ability to raise rents later on. And the more caveats you add to make it effective the more it resembles traditional rent control with all those consequences.

              And if the 10% cap is only ineffective and not actively counterproductive, what will you say to renters when they say the cap has to be lower to actually help them? I don’t think “this was only symbolic” will cut it. If there is evidence that a cap will help, let’s talk about that. But if it won’t, let’s be honest and advocate only for solutions that will actually help.

  3. Scott

    If you think the rent is too damn high, the best cure is to build a lot more apartments. Make building easy, fast, flexible, and inexpensive, and watch rents come down.

  4. Daniel HartigDaniel Hartig

    Good show. An expensive city is a good city…people want to live there! If people want to live there, then its time to build more and let people live there.

    1. Tom BasgenTom Basgen

      I think a more critical eye needs to be placed on “An expensive city is a good city.” even with the immediate addendum. We should be trying to the good and inexpensive city.

  5. Andre

    This is excellent. Thanks for writing it.

    I’d like to piggyback on your point regarding unit mismatch.

    Not only can rent control cause overcrowding of a unit (to keep the great deal) or force others into longer commutes because there isn’t enough churn in units – it can also potentially negatively impact the long-term financial health of the people occupying the unit.

    For example, a low-income person or family might move into a rent-controlled apartment because, among other things, it is near a bus line that brings them directly to their minimum-wage job. They work hard, gain skills, and decide they want to pursue a new job or go back to school. But it turns out that it’s hard to get to school from where they live or the bus doesn’t go to areas with higher-paying jobs that fit their skillset. So they’re stuck – they could move, but they lose their rent-controlled unit.

    By locking people in, it seems possible to hold back upward economic mobility.

    1. Karen Nelson

      Generally, we’d all be better off if most of us were renters with decent tenant protections, say like Germans.

      People underestimate the cost of moving as a homeowner, if they have to move frequently it eats up a ton of the appreciation, realtors, title stuff, refinancing etc.

      For renters needless chrin is brutal in moving costs etc..

      There is a lot of wasted churn in our system for both renters and homeowners, could be so much more efficient.

  6. Wanderer

    And until the NIMBYs are overcome, and tens of thousands of units are built, how will you provide affordable housing for people who are paying 50% and more of their income for rent now?

    1. Zachary WefelZachary Wefel Post author

      That’s a good question, but it is non-responsive to the post. Rent control either works, or it doesn’t. A lack of good short-term options doesn’t transform rent control into a good option. We shouldn’t adopt a policy evidence indicates will make people worse off; the urgency of the situation increases the importance of getting the policy response right.

      As a side note, rent control would require political organizing as well, so even if it were a viable strategy it wouldn’t necessarily be short term anyways.

      We need to address unaffordable rents. Rent control only does that at the expense of other renters. It should be a non-option.

      1. Karen Nelson

        That’s what is so frustrating, rent control is appealing because we have nothing better.

        Land value tax is non-starter because 60 percent of us our homeowners, not, gonna, happen.

        And supply not going to happen as long as 60 percent of us our homeowners and don’t want our biggest store of wealth AND the oakce we live, to lose value.

        1. Janne

          Karen, I’m not convinced that supply is not going to happen.

          Take Minneapolis as an example. We are a majority renter city, and renters here are organizing to address the financial and human rights violations some renters face. We are a community that is deeply concerned about ensuring our residents can live in dignity, that our children have access to safe stable homes, that we address challenges of homelessness. I know many homeowners who are concerned about our housing shortage and about what we face. Building a durable alliance advocating for more housing is something we can and must do together.

          Check out and join
          –the Minneapolis Renters Coalition (https://www.facebook.com/mplsrenters/(,
          –IX (Inquilinos Unidos por Justicia http://www.inquilinxsunidxs.org/en/home/), or
          –Neighbors for More Neighbors (https://medium.com/neighbors-for-more-neighbors/email-signup-a45c49685673)

    2. Daniel Hartigkingledion

      There are some basic citywide things that can be done to make infill densification affordable for landowners to undertake on their own. I’m talking about people in the upper middle class, with ~200k in assets and equity (I’m in this category, which is why I know this).

      – Upgrade all R1 to R2 city wide. This will allow building of accessory units (granny flats, room-over-garage (ROG), that sort of thing)
      – Raise R2 Floor Area Ratio (FAR) limits to 1 from 0.5.
      – Remove the limitation on stacked dwelling units (i.e., allow a top and bottom duplex, instead of just side to side)
      – Drop the side yard requirement from variable depending on lot width to 5 feet.

      This is a pretty moderate batch of changes, but it will not only ‘re-legalize’ many illegal houses (see: https://streets.mn/2018/02/07/low-density-zoning-threatens-neighborhood-character/) but also make it feasible for people to upgrade their own homes.

      There are a lot of neighborhoods with old, poorly maintained houses that are nevertheless ‘too dense’ for the current zoning code. Those houses _cannot_ be torn down because rebuilding at lower density is a money loser. If we liberalize the zoning code, big chunks of single family homeowner will be incentivized to rebuild; increasing square footage and kitchen space to make these homes more valuable on todays market. Anyone doing this for income reasons will be incentivized to push up to a duplex, to maximize rental income.

      Unlike Manhattan or SF, there isn’t a near infinite well of people willing to move into the city. If we increase housing in the city by just a little bit (a few thousand extra units, perhaps), it will probably fill; but with people moving inwards from the inner ring suburbs as rents drop. This will drop prices in the inner ring suburbs, leading to overall lower costs in the region.

      Conclusion: liberalizing zone is the solution, both now and long term. Restrictive zoning is the real enemy.

  7. GlowBoy

    As an economics minor myself, I studied the rent control issue back in the day, and I agree that in *general*, classic New York style rent control does not work. In the long run it does indeed suppress supply, discourage maintenance, and promote conversion to condos (which, ironically, New Yorkers – and only New Yorkers, as far as I’m aware – still refer to as apartments).

    As a longtime Portlander, though, I’ve applauded the very modest “rent control” measure they’ve passed there. It’s been common for tenants to get hit with abrupt 30% to 50% increases (forcing out my own sister-in-law, among many others). I don’t believe the law will have the effect of suppressing supply, because in the long run large rent increases will not (and cannot) be sustained. It just provides some temporary protection for renters against sudden large increases.

  8. Patrick

    I find that the people who are against rent control generally do not have an issue making rent. For those that do, it’s an invaluable tool towards making it through the month.

    I’d love to see the city get more dense, and I’m all for building new housing, but to write off one tool in the toolbox reeks of incredible privilege.

    1. Adam MillerAdam Miller

      Except the argument – based on economic theory and actual study/observation – is that it is not a tool and instead makes the problem worse.

      I’m all for measures to help renters stay in and afford their current homes, but we also need to be mindful of medium and longer term impacts. Ultimately, it doesn’t do much good to help people afford this month’s rent at the cost of higher rent next year or down the line.

        1. Zachary WefelZachary Wefel Post author

          Do you have any evidence that rent control lowers eviction rates? The literature I found on that was fairly mixed and really addressed the proxy of homelessness instead of evictions directly.

          The evidence I provided in the post shows that rent control reduces the availability of housing for renters and actually displaces renters from existing rental property (point 1), drives redevelopment of housing into more expensive or non-rental units (point 2), and transfers benefits largely to wealthier renters at little risk of eviction (point 6).

          Even if rent control can provide a reduction in evictions among renters lucky enough to receive rent controlled units that benefit is largely at the expense of other renters. Do you consider this redistribution an acceptable cost of rent control, especially considering it is likely from lower income and likelier to be displaced tenants to higher income, more secure tenants?

          1. Patrick

            It’s not hard to find anecdotes about people who are facing eviction due to rapid rent increases, the very sort of thing rent control is good at abating. Sure you can try to argue the long game as so many due, but to paraphrase Keynes in the long run we’re all dead.

            You make a lot of references to San Francisco, but getting beyond geographical boundaries and tech boom that the Twin Cities does not face, you also do not delve into Proposition 13 which drives much of the property use decisions in the State. The act has been a major upward force on occupancy tenure of both owner and renter-occupied housing. If you look to New York, rents are way up in spite of a housing boom. Many would point to rent control here, but in most cases buildings built after 1974 are exempt from these policies.

            The fact is that we need a lot more housing, and rent control has little to do with that fact. Arguing with a right-wing supply and demand mindset makes no sense for a human need, as even if there is enough housing it will never serve those at the margins. If we’re focused on the long term, we need to build a ton of housing, and public investment is likely the only way that’s going to happen. In the short term, we have people making difficult choices and being evicted from their long-time residences because landlords are seizing on market-forces to price people out of their homes. If that’s not a place where the state has every right to step in with reasonable measures to ameliorate that reality, I’m not sure what is.

            1. Zachary WefelZachary Wefel Post author

              The emphasis on San Francisco was due to the exceptional quality of the data it was based on, not because it was a surprising result. The literature review linked to in the post finds similar results in a number of cities, including New York over many decades. Studies of rent control consistently find it harms more than it helps.

              Yes, some people benefit under rent control, but it’s at the expense of other renters who are worse off. If that’s a tradeoff you’re willing to make, okay, but you should acknowledge you’re making that tradeoff. I’m not willing to hurt some renters to help others, especially when those who are hurt are likely the most vulnerable.

              When you say, “The fact is that we need a lot more housing, and rent control has little to do with that fact” how do you reconcile that with the supply-suppressing/conversion results of the studies I’ve provided?

              Finally, setting aside the fact that you lumped in people like Gunnar Myrdal as having a “right-wing supply and demand mindset” I’d argue that being willing to test our beliefs and change our minds are hallmarks of Progressivism, or at least should be. The GOP rejects climate change not because they’re anti-science, but because they disagree with the policies that we’d be obligated to pass if climate change were real. I’m eager to hear specific criticism of the studies that I’ve referenced here, or to see examples of where rent control has worked (and by what metric), but I don’t think we should reject the field of economics when we don’t like the result. We can only help people if our policies really do have positive real world effects.

              1. Patrick

                We need a lot more housing here, and yet we don’t have rent control here. There’s clearly a lot more factors at play here, and some basic controls on what landlords can do to tenants has nothing to do with whether we confront those issues.

                We definitely need to test our beliefs, but I am yet to see a compelling reason as to why we shouldn’t at least be open to pulling some basic levers to help ensure that incumbents are able to continue living in what you refer to as a “human right.” I get that this is on the opposite side of prevailing economic thought (see for example: http://www.igmchicago.org/surveys/rent-control) yet we shouldn’t blindly accept economic thought as a proxy for policy. If we did that, we’d be eliminating public schools (http://www.igmchicago.org/surveys/school-vouchers) and doing a lot of other harmful things that I suspect you wouldn’t argue for.

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