Source: Urban Institute, Oakland University, Colorado State University, & Federal Housing Finance Agency (2023)
Rent control reduces the total number of rental units and discourages new construction. Higher-income tenants often benefit more than low-income renters, leaving fewer affordable units for those most in need.
Key Findings: Rent Control Harms Housing Supply and Affordability
Reduction in Overall Rental Supply:
○ Rent control reforms cause a significant decrease in the total number of rental units, particularly for households earning more than 120% of Area Median Income (AMI). This reduction shrinks housing availability for a wide range of renters.
Erodes Affordability for Most Income Groups:
○ While rent control increases units affordable to extremely low-income households (below 30% of AMI), it sharply reduces the availability of units for moderate- and higher-income renters.
○ This policy creates a net loss in affordable housing, disproportionately affecting middle-income renters.
Discourages New Construction and Maintenance:
○ Rent control deters developers from building new housing and incentivizes landlords to neglect property maintenance, leading to deteriorating housing quality.
○ These policies prevent much-needed investments in both new and existing rental stock, worsening housing conditions over time.
Distributes Benefits Inequitably:
○ Rent control benefits higher-income tenants as much as, if not more than, low-income renters. Studies show tenants in the top 50% of income distribution occupy 30% of rent-controlled units, limiting availability for those in genuine need.
Conclusion:
This study confirms that rent control is a harmful policy. It reduces housing supply, worsens affordability for most renters, and creates inequities in who benefits. By discouraging development and investment, rent control exacerbates the housing crisis rather than solving it.