Effects of Rent Control on Housing Dynamics

What are the effects of rent control policies on housing market dynamics and tenant stability?

Rent control policies yield mixed results, decreasing rents in controlled units by 4-47% and extending tenant stays by up to six years, while simultaneously reducing housing supply and increasing eviction filings, with effects varying by policy design and local market conditions.

Abstract

Rent control policies yield mixed effects on housing market dynamics and tenant stability. In regulated markets, studies report rent declines ranging from 4% to 47% in controlled units while some analyses note rent increases in uncontrolled or post‐decontrol sectors. In one San Francisco study, rents rose concurrently with a 15% reduction in housing supply and a 20% drop in tenant mobility. Other research documents tenants staying an extra six years under tighter regulation, although reports of 83–127% higher eviction filings suggest displacement risks in certain settings.

Separate analyses show shifts in market composition. For example, one study cited annual rent subsidies of about US$2440 (roughly 27% of income), and another observed reduced racial disparities accompanied by increased minority presence. These findings, based on quasi‐experimental and econometric approaches across diverse jurisdictions, indicate that the impacts of rent control vary with policy design and local market conditions.

Methods

We analyzed 40 sources from an initial pool of 989, using 8 screening criteria. Each paper was reviewed for 5 key aspects that mattered most to the research question. More on methods.

Characteristics of Included Studies:

• Study Location/Period: Various locations including San Francisco, USA; Catalonia, Spain; Denmark; Germany, and New York City, USA.
• Rent Control Policy Type: Policies include first-generation and second-generation rent controls with different mechanisms and exceptions.
• Primary Outcomes Measured: Rental prices, housing supply, tenant stability, maintenance, and eviction rates.
• Methodology: Varied methods employed including quasi-experimental, econometric studies, and difference-in-differences.

Results

Across 40 studies of rent control policies, the following patterns were observed:

• Rental Prices: Measured in 25 studies.
• Housing Supply: Measured in 20 studies.
• Tenant Stability: Measured in 16 studies.
• Maintenance: Measured in 9 studies.
• Evictions: Measured in 3 studies.
• Market Dynamics: Measured in 6 studies.

Effects on Housing Market Dynamics

Research indicates a decrease in rents in 11 studies and an increase in rents in 10 studies, depending on market segment. There were reported decreases in housing supply or construction in 4 studies and increases in others.

Effects on Tenant Stability and Demographics

The studies show an increase in tenant stability in some cases, while others report higher eviction rates. Notable findings include increased subsidies and decreased racial disparities, alongside increased minority presence as a result of rent control policies.

References

• Jordi Jofre-Monseny, et al. (2023) - Effectiveness and supply effects of high-coverage rent control policies.
• Rebecca Diamond, et al. (2019) - The Effects of Rent Control Expansion on Tenants, Landlords, and Inequality: Evidence from San Francisco.
• Mats Wilhelmsson, et al. (2011) - Rent Control and vacancies in Sweden.