Should we get rid of rent control?
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From an economic point of view, getting rid of rent control is absolutely the right thing to do. Some people would argue for it on political grounds, but economists say that it is bad for the economy in general and for those whom it is supposed to help.
Rent control is a form of a price ceiling. Supply and demand analysis tells us that price ceilings lead to shortages of a good or service. This is because the set an artificially low price. This means that the quantity supplied is lower than at equilibrium while the quantity demanded is higher.
Rent control leads to a number of bad outcomes. It leads to the creation of less housing because developers cannot make good profits on what they build. It leads to deterioration in the sort of housing that is available to low income people. This is because landlords cannot make as much profit as they should be making and so they skimp on maintenance. It leads to high costs for the government as it needs a large bureaucracy to administer the rent control.
For all of these reasons and more, economists would say that rent control is bad for everyone and should be abolished.
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