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Rent regulation: Difference between revisions
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The classic objective is to limit the price that would result from the market, where an [https://en.wikipedia.org/wiki/Inequality_of_bargaining_power inequality of bargaining power] between [https://en.wikipedia.org/wiki/Landlord landlords] and [https://en.wikipedia.org/wiki/Leasehold_estate tenants] produces continually escalating prices without any stable [https://en.wikipedia.org/wiki/Market_equilibrium market equilibrium]."<br/> - Wikipedia, "Rent regulation."
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== <br/> Price regulation variant forms ==
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== References ==
*Ambrosius, Joshua D. et al [2015]. “Forty years of rent control: Reexamining New Jersey’s moderate local policies after the great recession,” Cities, 49, pp. 121–133. December 2015. https://doi.org/10.1016/j.cities.2015.08.001.<br/>
*Arnott, Richard. “[https://www.aeaweb.org/articles?id=10.1257/jep.9.1.99 Time for Revisionism on Rent Control?]” The Journal of Economic Perspectives, 1995: Vol. 9, №1: 99–120.<br/> [https://www.aeaweb.org/articles?id=10.1257/jep.9.1.99 https://www.aeaweb.org/articles?id=10.1257/jep.9.1.99].<br/> Abstract: "Economists' traditional hostility to rent contols is based on models that treat the housing market as perfectly competitive and on the experience with 'hard' controls in New York City and many European countries following World War II. The current 'soft' rent control systems in North America are varied and qualitatively different from earlier hard controls. The theoretical case against them is weak, particularly when the housing market is viewed as imperfectly competitive. The empirical case against them is weak, too. Economists should reconsider their blanket opposition to current rent control systems and evaluate them on a case-by-case basis."<br/>
*Autor, D.H. , and C J Palmer, P A Pathak [2014]. "[https://doi.org/10.1086/675536 Housing Market Spillovers: Evidence from the End of Rent Control in Cambridge, Massachusetts]." Journal of Political Economy, volume 122, p. 661-717. June 2014<br/> https://doi.org/10.1086/675536. <br/>
*Barton, Stephen. "[http://dollarsandsense.org/archives/2019/0119barton.html The Economics of Residential Rent Control]." Dollars and Sense, Jan/Feb 2019. http://dollarsandsense.org/archives/2019/0119barton.html.<br/>
*Chew, Amee, and Sarah Treuhaft. "Our Homes, Our Future: How Rent Control Can Build Stable, Healthy Communities." PolicyLink, February 2019. https://www.policylink.org/resources-tools/our-homes-our-future.
''"Multiple longitudinal studies of rent control in New Jersey have found no discernible impact on construction rates.<sup>(73)</sup> After the repeal of rent control in Boston, construction rates decreased for multifamily buildings, even as rents nearly doubled in eight years.<sup>(74)</sup>''
''<sup>(73)</sup> "As have studies in the Bay Area, Berkeley, Los Angeles, Washington DC, and elsewhere. <br/> Ambrosius et al., “Forty Years of Rent Control”; <br/> Gilderbloom and Ye, “Thirty Years of Rent Control”; <br/> Gilderbloom, “Moderate Rent Control”; <br/> Zuk, “Rent Control: The Key to Neighborhood Stabilization?”; <br/> Planning & Development Department, “Rent Control in the City of Berkeley, 1978 to 1994”; <br/> Baar, Burns, and Flaming, “San Jose ARO Study,” 177; <br/> Keating, Teitz, and Skaburskis, eds., Rent Control.<br/> <br/> <sup>(74)</sup> Chen, “When Rent Control Just Vanishes; Both Sides of Debate Cite Boston’s Example”; <br/> Collins, “Rent Regulation in New York”; <br/> Dreier, “Rent Deregulation in California and Massachusetts.”''
*Diamond, Rebecca, Tim McQuade, & Franklin Qian (2017). “[http://conference.nber.org/confer//2017/PEf17/Diamond_McQuade_Qian.pdf The Effects of Rent Control Expansion on Tenants, Landlords, and Inequality: Evidence from San Francisco].”
**26 September, 2017 version. [https://drive.google.com/open?id=1zjClPSHvzBx7LpSaD56I8FdWuFiXrdRq PDF].
**11 October, 2017. NBER working paper. [http://conference.nber.org/confer//2017/PEf17/Diamond_McQuade_Qian.pdf http://conference.nber.org/confer//2017/PEf17/Diamond_McQuade_Qian.pdf].
**29 November 2017 version. [https://drive.google.com/open?id=13pzS8XOAHXgvWdT6ddeoFy123Y_hoJ4y PDF]. <br/>
*Early, Dirk, and Jon Phelps (1999). "Rent Regulations' Pricing Effect in the Uncontrolled Sector: An Empirical Investigation." Journal of Housing Research: 1999, Vol. 10, No. 2, pp. 267-285. DOI: 10.5555/jhor.10.2.j11873517nq95773. <br/>
*East Bay For Everyone. "[https://www.scribd.com/document/350029454/Ab-1506-Support#from_embed RE: AB 1506 - Residential Rent Control: Costa-Hawkins Rental Housing Act.]" (letter). 2017. [https://www.scribd.com/document/350029454/Ab-1506-Support#from_embed https://www.scribd.com/document/350029454/Ab-1506-Support#from_embed].<br/> ▼
*Favilukis, Jack Y and Mabille, Pierre and Van Nieuwerburgh, Stijn. "[https://ssrn.com/abstract=3265918 Affordable Housing and City Welfare]." (May 24, 2019). Columbia Business School Research Paper No. 18-77. Available at SSRN: https://ssrn.com/abstract=3265918 or http://dx.doi.org/10.2139/ssrn.3265918.
''"We model rent control (RC) as mandatory inclusionary housing, a policy that requires developers to set aside a fraction of rental housing to low-income households at below market rates and is allocated by lottery. "''
''"We also find a lower housing stock and higher rents from a RC expansion, but an aggregate welfare gain for the entire MSA in spatial equilibrium."''
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''"Direct measurement on the number of mandatory inclusionary housing units is not available. Nor is it appropriate given that there are many more af- fordable housing units from a range of programs. We de ne RC housing as all housing units that are (i) rent controlled, (ii) public housing, (iii) Mitchell Lama housing, (iv) all other government-assisted or regulated housing."''
*
Gilderbloom, John I. [1981]. "Moderate Rent Control: Its Impact on the Quality and Quantity of the Housing Stock." ''Urban Affairs Quarterly'' 17, no. 2 (Dec 1981).
*
Gilderbloom, John I., and Richard P. Appelbaum. [1988]. ''Rethinking Rental Housing'' (Temple University Press, 1988).
*
Gilderbloom, John I., and Lin Ye. [2007]. "[https://drive.google.com/open?id=1cBR_YmIhhljXBWF2nm2W09TOPBxQn6s3 Thirty Years of Rent Control: A Survey of New Jersey Cities]." Journal of Urban Affairs 29, no. 2 (2007): 207–20. DOI: https://doi.org/10.1111/j.1467-9906.2007.00334.x. PDF: https://drive.google.com/open?id=1cBR_YmIhhljXBWF2nm2W09TOPBxQn6s3.
▲*East Bay For Everyone. "[https://www.scribd.com/document/350029454/Ab-1506-Support#from_embed RE: AB 1506 - Residential Rent Control: Costa-Hawkins Rental Housing Act.]" (letter). 2017. [https://www.scribd.com/document/350029454/Ab-1506-Support#from_embed https://www.scribd.com/document/350029454/Ab-1506-Support#from_embed].<br/>
*Gordon, Leslie. “[http://urbanhabitat.org/sites/default/files/UH%202018%20Strengthening%20Communities%20Through%20Rent%20Control.pdf Strengthening Communities through Rent Control and Just-Cause Evictions: Case Studies from Berkeley, Santa Monica, and Richmond.]” Urban Habitat (Oakland, CA), January 2018. <br/> [http://urbanhabitat.org/sites/default/files/UH%202018%20Strengthening%20Communities%20Through%20Rent%20Control.pdf http://urbanhabitat.org/sites/default/files/UH%202018%20Strengthening%20Communities%20Through%20Rent%20Control.pdf].<br/>
*Heskin, Allan D., Ned Levine & Mark Garrett. “The Effects of Vacancy Control: A Spatial Analysis of Four California Cities.” ''Journal of the American Planning Association'', Volume 66, 2000 - Issue 2, Pages 162-176. DOI: 10.1080/01944360008976096. <br/> [https://doi.org/10.1080/01944360008976096 https://doi.org/10.1080/01944360008976096]<br/> ''“Abstract: <br/> This article examines changes between 1980 and 1990 in the number of rental units and the demographic composition of tenants in four California cities that adopted rent control with vacancy control provisions. Six border areas within the four cities were compared to border areas of adjoining cities that did not have vacancy control. A spatial lag regression model was constructed to estimate the changes in regional and neighborhood components in addition to vacancy control policies. Vacancy control contributed to lower rents and longer tenure by tenants compared to non-vacancy-controlled areas. There were also fewer rental units in part because of a shift from rental housing to owner-occupied housing.”''<br/>
*Initiative on Global Markets (at University of Chicago Booth School) [IGM 2012]. “[http://www.igmchicago.org/surveys/rent-control Rent Control]” [poll of economic experts]. <br/> February 7th, 2012. [http://www.igmchicago.org/surveys/rent-control. http://www.igmchicago.org/surveys/rent-control. ]<br/> ''Poll statement: “Local ordinances that limit rent increases for some rental housing units, such as in New York and San Francisco, have had a positive impact over the past three decades on the amount and quality of broadly affordable rental housing in cities that have used them.” <br/> 40 respondents. <br/> 0 Strongly Agree<br/> 2% Agree<br/> 7% Uncertain<br/> 49% Disagree<br/> 32% Strongly Disagree<br/> 2% No Opinion''<br/>
*Jenkins, Blair [2009]. "Rent Control: Do Economists Agree?" ''Econ Journal Watch'' [American Institute for Economic Research], Vol 6, No 1, January 2009. pp 73-112. <br/> https://econjwatch.org/articles/rent-control-do-economists-agree.<br/>
*Keating, Teitz, and Skaburskis, eds. ''Rent Control: Regulation and the Rental Housing Market''. Center For Urban Policy Research, 1998.<br/> Available for online line from Internet Archive: https://archive.org/details/rentcontrolregul00keat. <br/>
*Kurtek, Sanela. "[https://torontoism.com/toronto-news/2017/12/rent-controls-toronto Why Rent Controls are Such a Problem for Toronto]." ''Torontoism, ''December 18, 2017.<br/> [https://torontoism.com/toronto-news/2017/12/rent-controls-toronto https://torontoism.com/toronto-news/2017/12/rent-controls-toronto].<br/>
*Legislative Analysts Office (California). [http://www.lao.ca.gov/ballot/2017/170629.pdf Review of proposed statutory initiative pertaining to rent control (A.G. File No. 17-0041)]. 12 Dec 2017. [http://www.lao.ca.gov/ballot/2017/170629.pdf http://www.lao.ca.gov/ballot/2017/170629.pdf].<br/>
*McFarlane, Alastair. “Rent stabilization and the long-run supply of housing.” Regional Science and Urban Economics, Volume 33, Issue 3, May 2003, Pages 305-333. DOI: 10.1016/S0166-0462(02)00031-5<br/> [https://doi.org/10.1016/S0166-0462(02)00031-5 https://doi.org/10.1016/S0166-0462(02)00031-5].<br/> ''"Abstract: <br/> This paper examines the impact of moderate rent controls on the construction and replacement of urban housing. It studies a common form of rent regulation that limits rent growth to below-market increases but permits landlords to set the base rent at free market levels and allows them to re-set rents when the incumbent tenant vacates, after which rents are re-controlled (‘vacancy decontrol–recontrol’). '''One of the primary insights is that neither the timing nor the density of construction is affected by rent stabilization when base rents are perfectly flexible. Allowing landlords to set the initial contract rent lets them capture the benefits to the renter of rent stabilization. Perfect capitalization of rent stabilization into a higher base rent provides the landlord with a free market rate of return and thus does not distort development activity.''' However, redevelopment of land will be hastened because rent stabilization complemented by vacancy decontrol–recontrol increases the difference between rents before and after redevelopment, increasing the opportunity costs of postponing redevelopment. Extensions include an analysis of other common rent regulations and the impact of rent stabilization on the urban rent gradient."''<br/>
*
*Niemietz, Kristian. "How Germany Made Rent Control "Work": Rent Control "Works" when It ... Doesn't Control Rents." FEE.org, June 03, 2016. [https://fee.org/articles/how-germany-made-rent-control-work/. https://fee.org/articles/how-germany-made-rent-control-work/. ]<br/> ▼
Montojo, Nicole, Stephen Barton, and Eli Moore, “Opening the Door for Rent Control: Toward a Comprehensive Approach to Protecting California’s Renters,” (Haas Institute for a Fair and Inclusive Society, 2018). <br/> https://haasinstitute.berkeley.edu/opening-door-rent-control.
''"numerous empirical studies, as well as housing production trends in cities with rent control, show no negative effect on housing production." <sup>(111)(112)</sup>.''
''<sup>111</sup> Zuk, Miriam (September 2015). “Rent Control: The Key to Neighborhood Stabilization?” Accessed at https://haasinstitute. berkeley.edu/rent-control-key-neighborhood-stabilization.<br/> <sup>112</sup> Arnott, Richard (1995). “Time for Revisionism on Rent Control?” The Journal of Economic Perspectives 9(1), pp. 99–120. <br/> <br/> Ambrosius, Joshua D. et al. “Forty years of rent control: Reexamining New Jersey’s moderate local policies after the great recession,” Cities, 49, pp. 121–133. ''
''Gilderbloom, John and Richard Appelbaum (1988) Rethinking Rental Housing, pp. 134-136. ''
''Ken Baar, “Facts and Fallacies in the Rental Housing Market”, Western City, Sept. 1986, 49 - 50. as cited by Abood, Maya, Vanessa Carter, and Manuel Pastor (forthcoming) “Rent Regulations: A Literature Summary”. USC Program for Environmental and Regional Equity.<br/> [apparently not available online]. ''
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National Multifamily Housing Council. "[https://www.nmhc.org/news/articles/the-high-cost-of-rent-control The High Cost of Rent Control]." [undated]. https://www.nmhc.org/news/articles/the-high-cost-of-rent-control/.
''"Inhibition of New Construction:<br/> "By forcing rents below the market price, rent control reduces the profitability of rental housing, directing investment capital out of the rental market and into other more profitable markets. Construction declines and existing rental housing is converted to other uses.''
''"Studies have shown, for example, that the total number of rental units in Cambridge and Brookline, Massachusetts, fell by 8 percent and 12 percent respectively in the 1980s, following imposition of stringent rent controls. Rental inventories in most nearby communities rose during that period.<sup>(2)</sup> Similarly, in California the total supply of rental units dropped 14 percent in Berkeley and 8 percent in Santa Monica between 1978 and 1990, even though the rental supply rose in most nearby cities.<sup>(3)</sup> And in the United Kingdom, which has imposed rent control since the Second World War, the share of all housing provided through privately owned rental units dropped from 53 percent in 1950 to less than 8 percent in 1986, reflecting the flight of investment from the regulated market.<sup>(4)</sup>''
''<sup>2.</sup> Rolf Goetze, Rent Control: Affordable Housing for the Privileged, Not the Poor. Report prepared for the Small Property Owners Association of Cambridge, 1994.''
''<sup>3.</sup> St. John and Associates, Rent Control in Perspective -- Impacts on Citizens and housing in Berkeley and Santa Monica Twelve Years Later. (Berkeley: Pacific Legal Foundation, 1993).''
''<sup>4.</sup> R.N. Chubb, Position Paper: United Kingdom. Report UP/L(87)28 (Paris: Organization for Economic Cooperation and Development, 1987).''
▲*Niemietz, Kristian. "How Germany Made Rent Control "Work": Rent Control "Works" when It ... Doesn't Control Rents." FEE.org, June 03, 2016. [https://fee.org/articles/how-germany-made-rent-control-work/. https://fee.org/articles/how-germany-made-rent-control-work/.
*Olsen, Edgar [1972]. An Econometric Analysis of Rent Control. Journal of Political Economy 80(6):1081-100. DOI: https://doi.org/10.1086/259959. PDF: https://drive.google.com/openid=1AKUdayTtyQTObdLRTb7v2r5sOkHj1I-a.<br/> [an early and seemingly often-cited paper]. <br/> <br/> ''"The cost of producing a unit of housing service in a controlled apartment will be higher than the cost of producing a unit in the uncontrolled market. The argument is as follows. From the viewpoint of technical efficiency in the production of housing service, there is an optimal path of deterioration for each dwelling. The operation of a competitive housing market results in the attainment of this optimal path. Rent control results in a faster-than-optimal rate of deterioration. Therefore, rent control results in a higher unit cost of producing housing service in the controlled market."''<br/> <br/> ''"It seems quite likely that the cost of producing housing service in the uncontrolled market is higher than it would have been had rent control been terminated in New York City shortly after the Second World War. The existence of rent control in New York City probably makes the owners of uncontrolled rental housing sensitive to the possibility of changes in the rent-control law which would inflict capital losses on them. Indeed, in 1969 a mild form of rent control was extended to more than half of the then-uncontrolled rental stock...Therefore, it is reasonable to expect that investors in rental housing in New York City will demand and receive a higher-risk premium. If this argument is correct, then contrary to one of the assumptions underlying the empirical results in this paper, the long-run supply price of housing service in the uncontrolled market in 1968 was greater than it would have been had rent control never gone into effect in New York City. This implies that the occupants of uncontrolled housing were worse off than they would have been in the absence of rent control."''<br/>
*Painter, Gary. "Op-Ed: No, rent control doesn’t always reduce the supply of housing." LA Times, Oct 31, 2018. https://www.latimes.com/opinion/op-ed/la-oe-painter-rent-control-economist-20181031-story.html. <br/> cites USC Pastor study.<br/>
*Pastor, Manuel, Vanessa Carter, and Maya Abood. "[https://dornsife.usc.edu/assets/sites/242/%20docs/Rent_Matters_PERE_Report_Final_02.pdf Rent Matters: What Are the Impacts of Rent Stabilization Measures?]" (USC Program for Environmental & Re- gional Equity, 2018), https://dornsife.usc.edu/assets/sites/242/ docs/Rent_Matters_PERE_Report_Final_02.pdf.
''Q: Do rent regulations decrease housing production and supply?<br/> A: On balance, rent regulations do not impact new housing construction. ''
''"Gilderbloom and Ye (2007) used regression analysis of 76 New Jersey cities with rent stabilization and found that there was little to no statistically significant effect of moderate rent control on new construction after controlling for population, racial demographics, population change, income, the percentage of units that were renter occupied, vacancy rates, and unit age. Similarly, Sims (2007), in an analysis of Boston, Cambridge, and Brookline, MA, found that while building construction permits did rise after the repeal of rent stabilization in 1995, multifamily building permits actually reached their height in the mid to late 1980s—during rent stabilization. In short, there is not much evidence to support the notion that moderate rent stabilization impacts new construction."''
''"Berkeley Housing Director Dr. Stephen Barton has suggested that rent control could actually boost the construction market noting that in a hot real estate market, without rent stabilization or tenant protection, wealthy incoming tenants will crowd out lower-income renters."''
*Sims, D. P. (2007). "Out of control: What can we learn from the end of Massachusetts rent control?" Journal of Urban Economics, 61(1), 129–151.<br/> ''Abstract:<br/> "This paper uses the sudden end of rent control in Massachusetts in 1995 to estimate the effects of rent control. I examine Boston MSA data from the American Housing Survey years 1985–1998 to determine how rent control affected the quantity, price and quality of rental housing. My results suggest rent control had little effect on the construction of new housing but did encourage owners to shift units away from rental status and reduced rents substantially. Rent control also led to deterioration in the quality of rental units, but these effects appear to have been concentrated in smaller items of physical damage. I also examine specifications that allow rent control to affect rent levels both directly through controlled status and indirectly through spillover effects from nearby rent controlled units. These estimates imply that rent control may have small effects on the price of the non-controlled rental housing stock."''<br/>
*Tenants Together. "[https://medium.com/@tenantstogether/making-the-case-for-rent-control-c598740f5ce8 Making the Case for Rent Control]." Medium, Jan 22 2018.<br/> [https://medium.com/@tenantstogether/making-the-case-for-rent-control-c598740f5ce8 https://medium.com/@tenantstogether/making-the-case-for-rent-control-c598740f5ce8].<br/>
*Whitehead, Christine, and Peter Williams. "[http://lselondonhousing.org/wp-content/uploads/2018/10/LSE-International-Evidence-on-Rent-Control-Report-2018-Final.pdf Assessing the Evidence on Rent Control from an International Perspective]." LSE On Housing (London School of Economics), October 2018. http://lselondonhousing.org/wp-content/uploads/2018/10/LSE-International-Evidence-on-Rent-Control-Report-2018-Final.pdf.<br/>
*Wikipedia. "[https://en.wikipedia.org/wiki/Rent_regulation Rent regulation.]" <br/>
*Willis, John W. “[http://scholarship.law.cornell.edu/clr/vol36/iss1/3 Short History of Rent Control Laws,]” 36 Cornell L. Rev. 54 (1950). [http://scholarship.law.cornell.edu/clr/vol36/iss1/3 http://scholarship.law.cornell.edu/clr/vol36/iss1/3].<br/>
*Zuk, Miriam [2015]. “[https://haasinstitute.%20berkeley.edu/rent-control-key-neighborhood-stabilization Rent Control: The Key to Neighborhood Stabilization?]” Haas Institute, September 2015. https://haasinstitute. berkeley.edu/rent-control-key-neighborhood-stabilization.
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