Tuesday, April 12, 2022

How bad is rent control?

When I get to demand and supply, I show students the unintended effects of rent control: a price ceiling below the equilibrium price results in shortages, as there are more people who want to buy at the controlled price than want to sell.  

A new paper studying rent control in St. Paul shows that the policy doesn't even live up to intended purpose of transferring income from rich landlords to poor tenants:

  • ...rent control caused property values to fall by 6-7%, for an aggregate loss of $1.6 billion. 
  •  ... the tenants who gained the most from rent control had higher incomes and were more likely to be white, while the owners who lost the most had lower incomes and were more likely to be minorities. 
  • For properties with high-income owners and low-income tenants, the transfer of wealth was close to zero. 
And the sad conclusion: 
  • ...to the extent that rent control is intended to transfer wealth from high-income to low-income households, the realized impact of the law was the opposite of its intention.

2 comments:

  1. I'm so happy to share this with you that can read / see this now. When I started trading binary and forex a few months ago, I really didn't have the necessary tools to trade and I lost a lot until I met Pablo Martinez who taught me all about market psychology as he managed my account for me. Today I am grateful to him for his great offer and help because it really changed my financial situation with an investment capital of $1500 and now I'm earning around $35,500 - $30,000 profits per week. Here is his WhatsApp no: +44 7520 636249 or his email address: pm7234029@gmail.com
    Https://www.facebook.com/PM-Fast-Trade-104912912155335/

    ReplyDelete
  2. A friend of mine recommended brillianthackers800@gmail.com to me although i was feeling skeptical about them at first but i went ahead to message them and they helped me settle bank loans and they also helped me increase my credit score you can chat them on WhatsApp +14106350697, They will surely help you with your hacking problems at a very affordable price and they are very reliable and they deliver a perfect job

    ReplyDelete