Report

Rent control: does it work?

This report from UK think tank the Institute of Economic Affairs looks at whether rent control works.

Rent controls have well-intentioned goals, including reducing rental burdens and ensuring access to affordable housing. But these regulations can generate unintended consequences, stifling housing supply, reducing labour mobility, and driving up rents in unregulated dwellings. Market distortions caused by rent controls can also lead to discrimination against marginalised groups and the emergence of black-market activities.

Based on an analysis of 196 studies evaluating the impact of rent controls across 8 domains, this report finds that rent control has numerous negative effects. Though the majority of studies suggest rent controls leads to lower rents in controlled housing and higher homeownership they also result in:

Reduced supply of rental housing.

Reduced construction.

Reduced housing quality.

Reduced mobility.

Increased misallocation of housing.

Increased rents in housing not subject to rent control.

Policymakers should conduct a comprehensive cost-benefit analysis before introducing rent controls, rather than rushing to impose them on the basis of good intentions alone.