Rent regulation: Difference between revisions

*11 October, 2017. NBER working paper.&nbsp;[http://conference.nber.org/confer//2017/PEf17/Diamond_McQuade_Qian.pdf http://conference.nber.org/confer//2017/PEf17/Diamond_McQuade_Qian.pdf].<br/> ''"Abstract:&nbsp;<br/> In this paper, we exploit quasi-experimental variation in the assignment of rent control in San Francisco to study its impacts on tenants, landlords, and the rental market as a whole. Leveraging new micro data which tracks an individual’s migration over time,&nbsp;'''we find that rent control increased the probability a renter stayed at their address by close to 20 percent. At the same time, we find that landlords whose properties were exogenously covered by rent control reduced their supply of available rental housing by 15%, by either converting to condos/TICs, selling to owner occupied, or redeveloping buildings. This led to a city-wide rent increase of 7%&nbsp;'''and caused $5 billion of welfare losses to all renters. We develop a dynamic, structural model of neighborhood choice to evaluate the welfare impacts of our reduced form effects. We find that&nbsp;'''rent control offered large benefits to impacted tenants during the 1995-2012 period, averaging between $2300 and $6600 per person each year, with aggregate benefits totaling over $390 million annually.'''&nbsp;The substantial welfare losses due to decreased housing supply could be mitigated if insurance against large rent increases was provided as a form of government social insurance, instead of a regulated mandate on landlords."''<br/> &nbsp;

*29 November 2017 version. [https://drive.google.com/open?id=13pzS8XOAHXgvWdT6ddeoFy123Y_hoJ4y PDF].&nbsp;<br/> Abstract:<br/> "In this paper, we exploit quasi-experimental variation in the assignment of rent control in San Francisco to study its impacts on tenants, landlords, and the rental market as a whole. Leveraging new micro data which tracks an individual's migration over time, we fi􏰁nd that rent control increased the probability a renter stayed at their address by close to 20 percent. At the same time, we 􏰁find that landlords whose properties were exogenously covered by rent control reduced their supply of available rental housing by 15%, by either converting to condos/TICs, selling to owner occupied, or redeveloping buildings. This led to a city-wide rent increase of 5.1% and caused $2.9 billion of total loss to renters. We develop a dynamic, structural model of neighborhood choice to evaluate the welfare impacts of our reduced form eff􏰀ects. We 􏰁nd that rent control o􏰀ffered large bene􏰁fits to impacted tenants during the 1995-2012 period, averaging between $2300 and $6600 per person each year, with the present discounted value of aggregate benefi􏰁ts totaling $2.9 billion. The substantial welfare losses due to decreased housing supply could be mitigated if insurance against large rent increases was provided as a form of government social insurance, instead of a regulated mandate on landlords."<br/> <br/> "We fi􏰁nd that rent control off􏰀ered large bene􏰁fits to impacted tenants during the 1995-2012 period, averaging between $2300 and $6600 per person each year, with aggregate bene􏰁fits totaling over $214 million annually, with present discounted value of $2.9 billion. These e􏰀ffects are counterbalanced by landlords reducing supply in response to the introduction of the law. We conclude that this led to a city-wide rent increase of 5.1%. At a discount rate of 5%, this has a present discounted value of $2.9 billion dollars lost by tenents."

 

== California 'Costa-Hawkins' law repeal initiative ==

 

 

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