ABSTRACT
The economics literature is full of warnings about the deleterious effects of rent controls, and this chapter begins by presenting the traditional arguments. Under rent regulation, tenants pay extra when they move into their dwelling in return for security from eviction. Rent controls may be introduced in such situations to help reduce the extent of the redistributions created by the side effects of growth control policy. An economic rationale for regulation is sometimes called “rent control,” though it is not specifically related to housing, but refers instead to the existence of economic rents. In rental housing markets, however, the situation is very different, since the occupant’s well-being is reduced by rent increases. A fifth argument relates to the speed of market adjustment and the virtual lack of a supply response to increasing demand by lower-income renters in rapidly growing cities.
