Episode 42 - The Prospect of “Nationwide Rent Control”

In a January 2023 edition of the Wall Street Journal, an opinion piece commented on a letter the current President received from 50 lawmakers attempting to prevent “price-gouging” in the rental real estate markets. Robby and special guest Emma Herman discuss the economics of this particularly thorny policy called “rent control”.

Highlights

• Rent control and its effects on landlords and tenants
• Rent control is a price ceiling on the amount landlords can charge for rent, which can reduce the supply of rental properties
• The reasons why people want to be landlords
• In San Francisco, a study found that rent control benefits current tenants in the short run, but can freeze the rental market in time, leading to inefficiencies and lack of supply
• Landlords may be disincentivized to improve rental properties under rent control policies
• Removal of rent control in Cambridge was found to decrease crime, but it can be difficult to remove rent control policies once they are imposed
• Landlords are often left out of the conversation around rent control policies
• It is important for those who oppose rent control to get involved and make their voices heard
• A shadow market is a black market where people find ways around the price ceiling imposed by rent control policies
• People in Stockholm have to wait years for apartments, and some end up negotiating contracts with people ahead of them on the waiting list or paying exorbitant sublease fees
• Rent control policies can have unintended consequences that actually benefit those who were not intended to benefit from the policy
• Sometimes it is better to keep the hand of government off the marketplace and let the invisible hand of the market dictate price movements Episode Resources
• Connect with Kim Butler and Robby Butler
• www.wealthrenegadepodcast.com
• www.prosperityeconomics.org
• [email protected]
• [email protected]
• [email protected]
• Connect with Emma Herman
• [email protected]  

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