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GUIDANCE   MAY 2018

The Impacts of Rent Control: A
Research Review and Synthesis
By: Lisa Sturtevant, Ph.D

 

 

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Table of Contents
About NMHC, the NMHC Research Foundation and the Author 

3 

Introduction 

4 

What is Rent Control?  

6 

 

Key Findings  

6 

 

Impacts of Rent Control 

7 

Targeting Housing Benefits 

8 

Allocation of Existing Housing Units 

10 

Maintenance and Building Quality  

12 

Housing Availability 

14 

Rent Levels   

15 

Fiscal Impacts 

17 

Homelessness 

18 

Reviewed Research 

19 

© 2018, National Multi Housing Council 
All rights reserved. The text portions of this work may not be reproduced or transmitted in any form or by any means, 
electronic or mechanical, including photocopying, recording, or by information storage and retrieval systems, without permission in writing from the publisher. The views expressed are the authors’ and do not necessarily represent 
those of the National Multifamily Housing Council. 

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About NMHC
Based in Washington, DC, the National Multifamily Housing Council (NMHC) is a national association representing the interests of the larger and most prominent apartment firms in the U.S. NMHC’s members are the principal officers of firms engaged in 
all  aspects  of  the  apartment  industry,  including  ownership,  development,  management and financing.  NMHC advocates on behalf of rental housing, conducts apartment 
related research, encourages the exchange of strategic business information and promotes  the  desirability  of  apartment  living.  Nearly  one-third  of  Americans  rent  their 
housing, and almost 15 percent live in an apartment (buildings with five or more units).  
For  more  information,  contact  NMHC  at  202/974-2300,  e-mail  the  Council  at 
info@nmhc.org, or visit NMHC’s Web site at www.nmhc.org 

About the NMHC
Research Foundation 
In 2016, NMHC formed a non-profit (501(c)(3)) Research Foundation to produce research that will further support the apartment industry’s business interests. The work 
supported by the NMHC Research Foundation raises the industry’s standard of performance and encourage worldwide investment in the sector.  The NMHC Research Foundation funds unique and original research on a wide range of topics, including issues 
related to development and redevelopment activity, affordable and workforce housing, 
demographics, tax policy, regulatory environment and zoning and land use, among others.  For more information, visit www.nmhc.org/Research-Foundation. 

About the Author
Dr. Lisa Sturtevant has been involved in research and analysis on local economic, demographic and housing market conditions for more than 15 years. As president of Lisa 
Sturtevant & Associates, LLC, she leads housing needs assessments and planning projects for local communities throughout the country. In addition, she conducts special 
studies on housing issues for local and national organizations. 

NMHC Research Foundation

 THE IMPACTS OF RENT CONTROL: A RESEARCH REVIEW AND SYNTHESIS

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Introduction
Rent control laws limit the amount of rent a landlord can charge, either by setting a rent ceiling
and/or by limiting rent increases. The latter approach is sometimes referred to as a rent stabilization policy. Most rent control or rent stabilization policies also set rules for the conditions under which a landlord can evict a tenant.
Many policies allow landlords to petition for greater rent increases if they make significant improvements to the property. New York City’s rent control and rent stabilization laws are well
known, but rent control has also been adopted in cities in California, New Jersey, Massachusetts
and Maryland and in the District of Columbia. There are initiatives underway presently to expand
rent control in California (where rent control was restricted in 1995 by the Costa-Hawkins Rental
Housing Act) as well as Illinois, Washington and Oregon.
Renewed interest in rent control is a reaction to growing housing affordability challenges across
the country and in high-cost coastal markets, in particular. As rents continue to rise, rent control
is being advocated by some as a mechanism to help mitigate the rental affordability challenge
and make it easier for lower-income individuals and families to find housing they can afford in
high-cost regions.
Imposing limits on rents would seem to be a logical way to keep housing costs low for people
who need affordable housing. However, there are significant problems associated with rent control programs. Economists nearly universally agree that rent ceilings reduce the quantity and
quality of housing and that even more moderate forms of rent stabilization have efficiency challenges and negative housing market impacts.1
This report synthesizes the empirical research on the effects of rent control and rent stabilization
on individual renters and communities, building on prior evaluations of the rent control literature.2 This report does not include a review of every rent control study. Rather, the research
included in this review includes only empirical studies of rent control and rent stabilization programs in the U.S. Theoretical studies were excluded, as were studies that simply provided a descriptive analysis of a rent control program. Non-U.S. studies were excluded with the presumption that housing markets and housing policy are substantially different in other countries that
have implemented rent control. The vast majority of the studies included in this synthesis were
published in peer-reviewed journals, though other studies (e.g., consulting reports) were included if they met the other criteria.
The earliest study included in this synthesis was published in 1972 and the latest was released
in 2017. The reviewed research includes case studies of programs in a single market—New York,
Boston, Los Angeles, San Francisco, Santa Monica, Washington, D.C.—as well as fewer studies
that take a cross-sectional approach across markets. Most of the research employed various

                                                            
1

 Jenkins, Blair. 2009. Rent Control: Do Economists Agree? Econ Journal Watch 6(1): 73-112. 
 In addition to Blair (2009), see also Turner, Bengt and Stephen Malpezzi. 2003. A Review of Empirical 
Evidence on the Costs and Benefits of Rent Control. Swedish Economic Policy Review 10: 11-56. 

2

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multivariate statistical techniques, while a small handful of studies were able to take advantage
of a policy change that created a natural experiment (see Table 1).

Table 1. Empirical Studies of Rent Control and Rent Stabilization
(By Publication Date)
Authors (Date)
Olsen (1972)
Rydell et al. (1981)
Fallis and Smith (1984)
Mengle (1985)
Navarro (1985)
Linneman (1987)
Peat Marwick (1988)
Gyourko and Linneman (1989)
Ault and Saba (1990)
Gyourko and Linneman (1990)
Levine, Grisby and Heskin (1990)
Turner (1990)
Rappaport (1992)
Caudill (1993)
Honig and Filer (1993)
Moon and Stotsky (1993)
Ault, Jackson and Saba (1994)
Nagy (1995)
Malpezzi (1996)
Gissy (1997)
Grimes and Chressanthis (1997)
Nagy (1997)
Early and Phelps (1999)
Early (2000)
Glaeser (2002)
Glaeser and Luttmer (2003)
Krol and Svorny (2005)
Sims (2007)
Sims (2011)
Diamond, McQuade and Qian
(2017)

NMHC Research Foundation

Geographical Areas
NYC
Los Angeles
Los Angeles
Multiple
Cambridge, MA
NYC
NYC
NYC
NYC
NYC
Santa Monica
Washington, DC
NYC
NYC
NYC
NYC
NYC
NYC
Multiple
Multiple
Multiple
NYC
Multiple
NYC
California, New Jersey
NYC
New Jersey
Boston
Boston
San Francisco

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What Is Rent Control?
Rent control often refers to laws that set caps on rents, while rent stabilization generally refers
to policies that regulate how often and how fast rent levels can increase.3 Generally adopted at
the municipal level, rent control laws often are coupled with rules related to tenant eviction and
to exceptions to the rent levels or increases under certain circumstances. New York City has the
most established rent control laws, but there are currently rent control policies in place in communities in California, New Jersey, Maryland and the District of Columbia.
Local rent control or rent stabilization polices can vary on different dimensions:
•

Regulation of rent level or rates of rent increases and how these levels or rates are set;

•

Types of residential buildings or units subject to rent control, based on the age or size
of the building, and, consequently, what share of the locality’s rental stock is subject to
rent control;

•

Rules on rent changes upon a tenant vacating a rent-controlled unit (i.e., vacancy allowances/vacancy decontrol policies); and

•

Eviction rules that outline the circumstances under which landlords of rent-controlled
buildings can turn out a tenant.

The variation in rent control and rent stabilization policies has important implications for understanding findings from the research on policy impacts and for generalizing specific findings to
other existing and potential rent control policies. Market conditions also matter when measuring
the effects of rent control or rent stabilization, as does the length of time the law has been in
place. Furthermore, rent control is one of many different forms of regulation that can impact
housing supply and price, and sometimes it can be challenging to isolate rent control’s impact.

Key Findings  
Even with these caveats, there are several clear and consistent findings about how rent control
laws impact residents, landlords and local housing markets:
1.

Rent control and rent stabilization policies do a poor job at targeting benefits. While
some low-income families do benefit from rent control, so, too, do higher-income households. There are more efficient and effective ways to provide assistance to lower-income
individuals and families who have trouble finding housing they can afford.

2. Residents of rent-controlled units move less often than do residents of uncontrolled
housing units, which can mean that rent control causes renters to continue to live in
                                                            
3
Policies are sometimes referred to as “first-generation” and “second-generation” rent control to
distinguish between stricter programs with rent caps and more moderate programs that regulate
rent increases and provide tenant protections. In this paper, the term “rent control” is generally used
to refer to both types of programs unless otherwise specified.

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units that are too small, too large or not in the right locations to best meet their
housing needs.
3. Rent-controlled buildings potentially can suffer from deterioration or lack of investment, but the risk is minimized when there are effective local requirements and/or
incentives for building maintenance and improvements.
4. Rent control and rent stabilization laws lead to a reduction in the available supply of
rental housing in a community, particularly through the conversion to ownership of
controlled buildings.
5. Rent control policies can hold rents of controlled units at lower levels but not under
all circumstances.
6. Rent control policies generally lead to higher rents in the uncontrolled market, with
rents sometimes substantially higher than would be expected without rent control.
7. There are significant fiscal costs associated with implementing a rent control program.

Impacts of Rent Control  
The research on rent control and rent stabilization programs has examined the effects of those
regulations in several different areas:
•

Targeting Housing Benefits: How well do rent control policies assist the individuals
and families most in need of affordable housing?

•

Allocation of Existing Housing Units: Do rent control policies lengthen tenancy duration? Do they create a mismatch between units and households?

•

Maintenance and Building Quality: Does rent control lead to a decline in building
maintenance and lower building quality?

•

Housing Availability: Does rent control reduce the overall supply of rental housing?

•

Rent Levels: Are rents of controlled units lower than market-rate rents? Does a shortage in housing supply caused by rent control lead to higher rents in the uncontrolled
market?

•

Fiscal Impacts: Do rent control policies lead to lower levels of property tax revenue
collected by the municipality? How substantial are administrative costs associated with
rent control laws?

•

Homelessness: Does rent control increase homelessness as a result of reduced housing
supply?

The following review assesses the research evidence on each of these issues.

 

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Targeting Housing
Benefits
Hypothesis: Limiting rent levels or rent increases under a rent control law allows lower-income
individuals and families to gain access to housing they can afford in high-cost housing markets.
Depending on how it is implemented, a rent control strategy can create and preserve mixedincome neighborhoods and can help promote racial and economic integration.
Alternative: Because rent control creates a limited pool of below-market units, the law creates
a system where landlords are incentivized to exercise greater control over tenant selection.
Landlords of rent-controlled buildings could make units more readily available to households
with particular characteristics (e.g., higher-income households, households without children) or
prospective tenants who can pay a fee to apply for rent-controlled units. As a result, rent control
may not meet the needs of individuals and families most in need of affordable housing.
Overview of Findings: Rent control and rent stabilization policies do a poor job at targeting
benefits. While some low-income families do benefit from rent control, those most in need of
housing assistance are not disproportionately the beneficiaries of rent control. Furthermore, rent
control generally does not lead to more economically and/or racially integrated neighborhoods.
Implications: Rent control/rent stabilization is not an efficient mechanism for helping lowerincome households access affordable housing. There are more effective ways to provide assistance to lower-income individuals and families who have trouble finding housing they can afford.
For example, researchers point to increasing the number of federal housing vouchers and expanding the Low-Income Housing Tax Credit (LIHTC) program as more promising ways to create more affordable housing options.

Research Findings on Targeting Housing Benefits
Research demonstrates that New York City’s rent control and rent stabilization laws are administered indiscriminately and benefits from the programs tend to be quite small and poorly targeted. Based on the research reviewed, the inefficiency in targeting benefits in New York has
increased over time.
Using data from 19684, Gyourko and Linneman (1989) found some poorer individuals were benefitting from New York City’s rent control program; however, there was no evidence that the
program successfully targeted those most in need, so benefits of rent control were also enjoyed
by higher-income households. Using the same data, Olsen (1972) came to a slightly different
                                                            
4

 The New York Housing Vacancy Survey (NYHVS) was administered in 1968 and 1981 and provided detailed data on residents of rent-controlled, rent-stabilized and uncontrolled units. Therefore, a number 
of studies of NYC’s rent control programs use 1968 or 1981 data. The NYHVS currently is administered 
by the U.S. Census Bureau every three years to comply with New York state and New York City rent 
regulation laws. 

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interpretation, demonstrating that renters who lived in rent-controlled apartments had significantly lower average incomes than those in uncontrolled units. However, Olsen (1972) concluded
that there was significant variation in the distribution of the benefits of rent control and that
New York City’s program was “a poorly focused redistribution device.”
Looking at data between 1965 and 1968, Ault and Saba (1990) found that residents of rent-controlled apartments tended to be more likely minority and elderly—two groups a rent control
policy could want to target. However, over time, they found that the benefit of the rent control
subsidy in New York City was greater for higher-income households than for lower-income or
minority households. Furthermore, renters with similar needs or characteristics were very unlikely to receive similar levels of benefits under New York City’s rent control law, indicating that
the program did a poor job of targeting assistance.
These early studies of New York generally provide evidence from the city’s rent control law,
adopted in the 1940s, rather than the later-implemented rent stabilization law. Using 1981 data,
Linneman (1987) also concluded that both the city’s rent control and rent stabilization programs
were targeted haphazardly, benefitting some low-income households, particularly seniors, but
generally doing a poor job at directing housing benefits to those most in need. Early (2000)
used data from 1996 and confirmed not only that rent control and rent stabilization in New York
City were poorly targeted, but also that the city’s laws induced landlords to change the way they
recruited tenants, giving preference to older and smaller households. This observation that older
households (i.e., seniors) and smaller households (i.e., households without children) were preferred by landlords of rent-controlled properties was also made by Linneman (1987), Gyourko
and Linneman (1989) and Ault and Saba (1990).
While New York City’s rent control history is unique in many ways, the lack of efficient targeting
of the potential benefits of a rent control program is observed in other communities. In the Boston metropolitan area, Sims (2007) found that in the late 1980s and early 1990s, lower-income
households were not well served by rent control programs. Specifically, he found that about a
quarter (26 percent) of rent-controlled units were occupied by tenants with incomes in the bottom quartile while 30 percent of rent-controlled units were occupied by tenants in the top half
of the income distribution. Navarro (1985) had come to a similar conclusion about rent control
programs in the Boston area, examining data from the 1970s.
In her study of Washington, D.C.’s rent control policy, where about two-thirds of the stock was
under control during the 1980s, Turner (1990) concluded that D.C.’s rent control policy did not
benefit renters efficiently or equitably. In particular, the policy benefited renters who remained
in their units a long time (including affluent renters) and did not provide assistance to recent or
frequent movers (including poor individuals and families at risk of homelessness) who were unable to pay the above-market rents landlords could charge upon a tenant’s departure.
A benefit of a rent control policy could potentially be an increase in economic and racial integration if lower-income households are able to access housing in higher-income neighborhoods.
However, there is scant evidence of this benefit in the empirical research. Glaeser (2002) examined whether rent control increased residential integration in eight cities with rent control in
California and in seven cities with rent control in New Jersey. In rising cost regions, such as those
in California, rent control did increase lower-rent housing options; however, the occupants of
rent-controlled units in California and the beneficiaries of living in higher-opportunity neighborhoods tended to be seniors rather than families with children. In New Jersey, where housing

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markets were on the decline, rent control was actually associated with increased economic segregation in municipalities.
Using earlier data from 1979 and 1987 to evaluate Santa Monica’s rent control policy, Levine,
Grigsby and Heskin (1990) found the city’s rent control program did provide benefits to lowincome households in the city, finding no evidence that the city’s rent control policy provided a
disproportionate benefit to middle- and higher-income households. However, there was no impact on economic or racial integration in the community as a result of rent control.
Sims (2011) examined whether rent control in Cambridge, Mass., increased economic and racial
segregation and found that rent control appeared to increase the share of minority residents in
the city, but it was associated with a decrease in the proportion of very low-income residents.
Sims (2011) concluded that the modest impacts on racial integration in Cambridge were overshadowed by the increases in economic segregation in the community.

Allocation of Existing
Housing Units
Hypothesis: Rent control acts as a price control, which limits the overall supply of housing and
does not allow units to be allocated to the residents who would benefit most since price cannot
be used to sort renters into different units. Renters who gain access to rent-controlled apartments stay in those units longer than they would in a market-rate unit, even if the unit is no
longer appropriate for their household (e.g., too big or too small, based on changes in household
composition).
Overview of Findings: Residents of rent-controlled units are less mobile than residents of
uncontrolled housing units, and the benefit of living in a rent-controlled unit causes tenants to
remain in their units longer than they would without rent control, leading to a mismatch in unit
type or size and the need of the household.
Implications: Reduced mobility caused by rent control may limit the availability of so-called
“family-sized” units (i.e., units with three or more bedrooms) if tenants of rent-controlled units
remain in units after children have moved out on their own. There could also be instances of
housing overcrowding if residents of rent-controlled units stay in homes that are too small as
their family grows (e.g., after the birth of a child or when a relative moves in). Reduced mobility
associated with rent control could have other impacts.
Tenants of rent-controlled units may be less likely to change jobs or may be more likely to endure
long commutes because they do not want to move into a new unit. Rent control may induce
people to put off homeownership and to remain renters longer to take advantage of below-market rents. Finally, when residents of rent-controlled buildings stay in their units as their incomes
increase, rather than move into units with higher rents, the result is a reduction in the supply of
affordable housing available to those with lower incomes.

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Research Findings on Allocation of Existing Housing Units
Studies on rent control and rent stabilization in New York City consistently demonstrate that
these policies have been associated with reduced residential mobility and a significant “mismatch” between tenants’ housing needs and the characteristics of the units. Gyourko and Linneman (1989) used 1968 data to examine the distributional consequences of rent control in New
York City, demonstrating that New York City’s rent control policy led to longer tenures and lower
likelihoods of homeownership among tenants in rent-controlled units. Ault, Jackson and Saba
(1994) also examined 1968 data and estimated that the typical rent control tenant remained in
his or her unit about 18 years longer than an otherwise identical tenant in an uncontrolled unit.
Other research in New York City attempted to differentiate the residential mobility impacts of
rent control versus the more moderate rental stabilization program by using later data. Using
data from 1981, Linneman (1987) compared length of tenancy among residents living in uncontrolled units with tenancy among those living in units under the city’s rent control law and units
subject to the city’s later-enacted rent stabilization law.
Residents of strictly controlled rental units received significant rental subsides relative to those
of the stabilized and uncontrolled sectors, and that subsidy led to these renters remaining in
their units significantly longer than they would otherwise be expected. But Linneman noted that
there was no significant difference in the tenancy durations of residents of rent-stabilized units
and uncontrolled units. At the time of the data collection (in 1981), New York City’s rent stabilization policy had only been fully implemented for seven years (since 1974), which may partially
explain why no difference between tenants of uncontrolled and rent-stabilized units was found.
Nagy (1995) also compared residential mobility between renters living in rent-controlled units
and rent-stabilized units using data from 1978 and 1987 (between four and 13 years after full
adoption of rent stabilization in New York City). He found that tenants of rent-controlled units
were, in fact, significantly less mobile than those living in rent-stabilized units; however, the differences were not so clear after accounting for the differences in the socioeconomic characteristics of the two types of renters. For example, renters living in rent-controlled units were more
likely to be white and older compared to rent-stabilized renters, and those characteristics themselves are associated with reduced mobility.
Rappaport (1992) examined the effects rent control had on the probability of rental vacancies
and occupant turnovers in New York City, which is a slightly different way of looking at residential mobility and length of tenure. She found that compared to uncontrolled units, a rent-controlled apartment was about eight percent less likely to turn over in a three-year period.
Lower levels of residential mobility and longer tenures in current units suggest that tenants of
rent-controlled units would be more likely to live in housing that is not optimal either in terms of
size or amenities. Using data from the 1990 Census and comparing the New York City apartment
market to comparable areas that had not adopted rent control, Glaeser and Luttmer (2003)
found that between 15 and 21 percent of New York City apartment renters lived in larger or
smaller units than they would if they were living in a city without rent control or rent stabilization
(with the range depending on whether unit size was measured by rooms or bedrooms). The
authors cautioned that in New York City there also is a “housing misallocation” among both
renters in uncontrolled buildings and owners when compared to other markets, suggesting that
the New York City market may be generally inducing misallocation of units.

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In 1994, San Francisco adopted rent control protections for small multifamily housing (four units
or less) built prior to 1980. Diamond, McQuade and Qian (2017) compared outcomes for tenants
and landlords of small pre-1980 buildings and post-1980 buildings to estimate the impact of rent
control on residential mobility. The authors found that residents of rent-controlled buildings
were between 10 and 20 percent more likely to stay in their current unit over the study period,
with the effects significantly stronger among older households and among households that already had a long tenure in their current unit, two groups that have lower levels of residential
mobility even absent having access to a rent-controlled unit.
Washington D.C.’s rent control law was adopted in 1985 and applied limits on rent increases to
all units in buildings built before 1975. In an evaluation of rent control in D.C., Turner (1990) found
that tenants of rent-controlled units moved less frequently than tenants of other units, concluding that the city’s rent control program contributed to the very low rates of residential mobility
observed in the city. Turner (1990) did not find evidence of reduced probabilities of homeownership associated with rent control in Washington D.C.
Krol and Svorney (2005) examined the impacts on residential mobility of rent control programs
in New Jersey more implicitly by examining the links between length of commute and presence
of rent control. Using data from the 1980, 1990 and 2000 censuses, the authors found a positive
and statistically significant relationship between the presence of rent control in a city and commute times for workers who lived in those cities. The municipalities with the most restrictive
regulations were associated with the longest average commute times. Krol and Svorney (2005)
suggested that in New Jersey, a lack of household mobility was the driver of the longer commute
times and concluded that the relative immobility of the population was the factor underlying the
relationship they observed between rent control and commute times.

Maintenance and
Building Quality
Hypothesis: Limiting rents through a rent control or rent stabilization law reduces the return
on investments in rental housing and will cause landlords to choose to undermaintain their properties until the output of housing services (as measured by housing quality and amenities) declines to the level that is supported by the below-market rents.
Alternative: Even as rent control may limit landlords’ desire to maintain their properties, other
local ordinances that require landlords to maintain units to certain standards, to repay tenant
maintenance expenditures, and/or to permit rent increases for well-maintained or upgraded
units could counteract the potential negative impacts on housing quality associated with rent
control.
In addition, a rental subsidy in the form of rent control could encourage tenants to contribute to
maintenance and upkeep, counteracting any possible deferred maintenance on the part of the
landlord.

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Overview of Findings: There is no clear association documented in the empirical research
between rent control and building quality, particularly if other ordinances, requirements or incentives are present to have landlords maintain buildings.
Implications: Rent control laws in communities that have comprehensive requirements related to building maintenance may mitigate any potential negative impacts on housing quality.
However, without appropriate incentives or requirements, landlords of rent-controlled buildings
will be unlikely to make improvements to buildings. Furthermore, tenants of rent-controlled
buildings may feel obligated to take on more maintenance responsibilities and costs, which ends
up reducing the benefits of the rent control subsidy.

Research Findings on Maintenance and Building Quality
Earlier studies of rent control in New York City did find a negative relationship between rent
control and building quality, but researchers noted that it is difficult to isolate the rent control
impacts since the law applied to older and often lower-quality buildings. Using data from 1968,
Gyourko and Linneman (1990) found that New York City’s rent control law had a large and significant negative impact on the quality of rental buildings, but the impact was primarily for nonhigh-rise buildings and buildings that were already in a state of disrepair when rent control was
adopted. In the same study, Gyourko and Linneman (1990) provided modest evidence that rent
control in New York City induced maintenance and upkeep on the part of individual residents of
controlled units.
The relationship between rent control/stabilization and building quality in New York City is even
less clear cut in later years. Moon and Stotsky (1993) offered mixed evidence that rent control
led to a decline in housing quality in New York City over the 1978 to 1987 period. While there was
a possibility of the quality of rent-controlled units to decline over time, Moon and Stotsky (1993)
found that maintenance and improvements occurred in rent-controlled buildings when other
economic conditions were favorable to induce landlords to renovate. For example, if landlords
were able to offer a payout to existing tenants and/or were able to capitalize on higher rents
when existing tenants moved out, they could be incentivized to maintain their buildings. This
research also found that longer-term tenants of rent-controlled units in New York City were incentivized to provide maintenance and upkeep of their property even if the landlord did not.
Rent control was ended in Massachusetts in 1995, and the termination of rent control laws in
cities in the Boston metropolitan area provided a type of natural experiment to examine the
impacts of rent control. While Sims (2007) primarily focused on impacts of rent control on housing supply, the findings from this research also suggested that in the late 1980s and early 1990s,
rent control in Boston was associated with modest deterioration in the quality of the rental housing stock without a counteracting tenant-supplied maintenance and upkeep. Similarly, while not
the primary outcome analyzed in their evaluation of rent control in Los Angeles, researchers at
RAND (Rydell et al. 1981) found evidence of deferred maintenance and upkeep in rent-controlled
buildings.
However, after 15 years of rent control in Washington D.C., Turner (1990), found no evidence of
a decline in housing quality and, in fact, documented that units exempt from rent control in D.C.
had more maintenance issues than rent-controlled buildings. She concluded that other local policies helped to ensure building quality in the city.

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Looking across the country at other communities with rent control, Mengle (1985) attempted to
examine the relationship between housing quality and rent control across eight metropolitan
areas in the mid-1970s, with a dataset that included four metropolitan areas where rent control
was present and four where rent control was not present. While Mengle (1985) found evidence
of reduced residential building quality in the metropolitan areas with rent control, it was noted
that rent control laws varied considerably across municipalities in the study, but the model did
not explicitly attempt to account for those policy differences or attempt to ascertain other regulations or ordinances that could incentivize building maintenance.

Housing Availability
Hypothesis: Regulations that limit rents could reduce the availability of rental housing in both
the short- and long-term. Rent control could induce landlords of properties covered by the law
to convert their buildings to condominium ownership, thereby taking rental units off the market.
The supply of affordable rental housing could also be diminished if landlords redevelop their
properties such that the new units are not subject to rent-controlled laws. Longer-term, while
rent control regulations almost always exclude new construction, if rent control puts downward
pressure on market rents or if developers fear that in the future new units will be subject to
controls, they may not build new housing.
Overview of Findings: Rent control and rent stabilization laws generally led to a reduction
in the available supply of rental housing because landlords were induced to convert their properties into condominiums or to redevelop into housing not subject to rent control regulations.
The impact of rent control on new construction is less clear cut in the empirical research.
Implications: Rent control incentivizes landlords to convert their rental properties into condominiums, particularly when there is strong demand for and a lack of homeownership opportunities in a community. New housing construction may be negatively impacted if developers are
uncertain about future applications of rent control and rent stabilization policies.

Research Findings on Housing Availability
While there is a substantial body of theoretical work on the relationship between rent controls
and housing supply, there is surprisingly little empirical research on the impacts.
In a study of San Francisco over the 1995 to 2012 period, Diamond, McQuade and Qian (2017)
found that, overall, landlords with properties covered by rent control were more likely than other
property owners to convert their units to condominiums or to redevelop their buildings, which
reduced the supply of available rental housing in the city. Diamond, McQuade and Qian (2017)
estimated that the reduced supply of rental housing—in just this one segment of the multifamily
housing stock; that is, properties with four or fewer units—led to a seven percent increase in
city-wide rents.
Sims (2007) came to a similar conclusion in Boston. While he found no significant relationship
between the presence of rent control and the level of new housing construction in the Boston
area, rent control was associated with a shift from units offered as rentals to those offered as

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ownership, with landlords of rent-controlled buildings converting their units to condominium. In
the Boston region, therefore, it was estimated that rent control kept thousands of rental units
off the market.
In California and New Jersey, over the 1970 to 1990 period, Glaeser (2002) found mixed results
on the relationship between rent control and housing supply. In California, the supply of housing
in cities with rent control increased more slowly than it did in cities without rent control; however,
the difference was not statistically significant until Glaeser (2002) controlled by initial city size.
In New Jersey, there was a significant impact of rent control on the housing stock, with the overall
supply of housing actually declining in cities that had adopted rent control. However, that effect
disappeared when city size was controlled for. Thus, these findings suggest no clear-cut relationship between rent control and housing construction but also suggest that rent control impacts housing availability differently in different kinds of markets.

Rent Levels
Hypothesis: Rent control will keep rents of units in controlled buildings lower than market
rents, but if rent control results in a decline in the rental housing supply, then rents for uncontrolled units will be higher than what they would be without a rent control program in place.
Alternative: Depending on the vacancy decontrol policy, landlords of rent-controlled buildings
could set initial rents higher than market rents to compensate for lower future rents allowed
under rent control. Furthermore, tenants would be willing to pay higher rents initially if they
knew that rent increases would be capped over time.
Overview of Findings: Units subject to rent control usually have rents that are lower than
market rents, which provide a benefit to tenants of those units, often inducing them to stay
longer than they would otherwise. However, when a rent control policy includes a vacancy decontrol or vacancy allowance condition, new residents of controlled units could actually pay more
than market rates initially.
Rent control policies generally lead to higher rents in the uncontrolled market, with rents sometimes substantially higher than would be expected without rent control (i.e., between 10 to 25
percent higher). Over time, if rent control does not apply to new construction, there is some
evidence that the impact on uncontrolled rents diminishes.

Implications: Rent control policies can hold rents of controlled units at lower levels and benefit some tenants, particularly those who do not move often. However, adopting a rent control
law will lead to rent increases in the unregulated market, which reduces the well-being of residents of uncontrolled units and can actually diminish the overall welfare of all residents. Attempting to moderate a rent control policy by implementing a vacancy decontrol provision could
actually increase the rents of controlled units in the short-term.

Research Findings on Rent Levels
There is general consensus that rent control policies without vacancy allowances do lead to
lower rents for units in rent-controlled buildings. Gyourko and Linneman (1989) found that rent

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control resulted in significantly lower rents for controlled units. In fact, they estimated that the
reduced rents created a substantial subsidy for beneficiaries of rent control, possibly as high as
27 percent of renters’ total annual income. In a study of Los Angeles rent control over the 1969
to 1978 period, Fallis and Smith (1997) documented that rent control was, indeed, responsible for
keeping the rents of controlled units low.
Newer rent control and rent stabilization policies typically have a vacancy decontrol or vacancy
allowance policy that makes it more difficult to be certain that units in buildings subject to rent
control will have below-market rents. Under New York City’s rent stabilization program, when a
tenant vacates a unit, the landlord can reset the rent level, increasing it by up to 20 percent. Rent
increases as allowed under the rent stabilization policy then apply to this new, higher rent.
This vacancy allowance feature could result in some tenants of rent-stabilized apartments paying higher-than-market rents, at least initially. Nagy (1997) found that in 1981, tenants of rentstabilized units paid higher rents than did tenants of similar, uncontrolled apartments. However,
tracking tenants over time, Nagy (1997) found that rent-stabilized tenants had below-market
rents six years later (assuming they remained in the rent-stabilized unit.)
A bigger concern among policymakers has been whether adopting rent control will lead to increases of rents in the unregulated market, typically through a reduction in the supply of rental
housing. Caudill (1993) analyzed the New York City rental market in 1968 and concluded that
rents of uncontrolled units in the city were between 22 and 25 percent higher than they would
have been had rent control not been in place.
Early (2000) used New York City data from 1996 to demonstrate that rent control drove up rents
of uncontrolled units in the city and that the increase in rents in the overall rental market actually
made tenants of rent-controlled units worse off than they would have been if rent control had
not been in place. Lower rents in the broader uncontrolled market would have given rent control
tenants more opportunities to live in a unit that was a better fit for their needs, and their overall
utility would have been increased.
Fallis and Smith (1997) found that two years after the adoption of rent control in Los Angeles,
uncontrolled rents increased more than three times faster than rent-controlled units, and the
researchers concluded that it was the rent control policy itself—and not other characteristics of
the uncontrolled units or market—that led to the significantly greater rent increases.
In Boston, Sims (2007) documented a more complicated relationship among rent control, building quality and rent levels to find that rent levels of unregulated units declined in buildings near
rent-controlled buildings that were of lower quality.
There have been attempts to examine the link between rent control and market rents in crosssectional studies. While there are unanswered issues related to the endogeneity between rising
rents/rent levels and adoption of rent control, Malpezzi (1996) used data for 54 metro areas to
demonstrate a positive, significant relationship between the presence of a rent control policy
and median rent in the metropolitan area. Early and Phelps (1999) examined the impact of rent
control on uncontrolled rents in 49 metropolitan areas over the 1984 to 1996 period.
Results from this analysis suggested a positive and statistically significant relationship between
the presence of rent control and uncontrolled rents—specifically, the introduction of rent control
increased median uncontrolled rent levels by more than 13 percent. However, if rent control did

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not apply to new construction, the effect diminished over time, and between two and three decades after adoption of rent control, there is no significant relationship between the presence of
rent control and rent levels in the uncontrolled market. (Like other cross-sectional studies, there
was no attempt in either of these two studies to account for the variability in rent control programs and the fact that policies are often only in place in select municipalities within a region.)

Fiscal Impacts
Hypothesis: Because rent control limits investment return, and potentially building quality, it
can also reduce the value of the property and, as a result, lower the amount of property tax
revenue collected from the property owner. In addition, rent control increases public expenditures through administrative procedures to implement and oversee the rent control program.
Overview of Findings: While there is very little empirical research on the topics, rent control
laws can reduce the amount of property tax revenue collected on rental properties and can be
associated with fairly high administrative costs.
Implications: There can be significant costs to the municipality (and potentially to the state)
of implementing rent control.

Research Findings on Fiscal Impacts
There is very little empirical research on the relationship between rent control and local property
tax revenue. In his analysis of rent control in Cambridge, Mass., Navarro (1985) concluded that
the city lost out on between five and 10 million dollars per year in property tax revenue as a
result of lower property values induced by rent control. In New York City, a study conducted by
the accounting firm Peat Marwick (1988) estimated that there was a loss in taxable assessed
property values attributable to rent control at approximately $4 billion in the late 1980s, which
meant that the city lost out on an estimated $370 million annually in property tax revenue.
Rent control regulations create administrative processes that would not be required without the
law. As a result, there is a cost to the municipality (and potentially to a state) to implement,
administer and enforce a rent control program. In Cambridge, Navarro (1985) estimated that the
public costs to administer the city’s rent control program totaled about $40 per unit. Linneman
(1987) concluded that the administrative costs associated with New York City’s rent stabilization
policy were “substantial and inefficient.”

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Homelessness
Hypothesis: Rent control reduces the availability of housing and, therefore, can increase
homelessness in a community.
Overview of Findings: There is no consistent relationship observed between rent control
and the prevalence of homelessness.
Implications: Given the complex causes of homelessness, a rent control policy has an unknown effect on a community’s homeless population, but if it reduces the availability of affordable housing in that community, the homeless population will be better served by programs that
are more specifically targeted.

Research Findings on Homelessness
In a review of the relationship between homelessness and rent control in metro areas across the
country, Honig and Filer (1993) found no significant association either between the presence of
a rent control policy and homelessness or between rent control and incidences of overcrowding.
Early and Olsen (1998) found that rent control was associated with decreased rental vacancy
and increased rents, which could increase homelessness; however, they found that those potential effects were more than offset by other effects that decreased homelessness. Using 1990
data, Grimes and Chressanthis (1997) found a significant though very small impact of rent control
on the level of homelessness, though as Gissy (1997) also concluded, it is possible that underlying
factors related to both the likelihood of adopting rent control and level of homelessness could
be an intervening factor explaining the relationship.
 

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Reviewed Research
Ault, Richard W., John D. Jackson, and Richard P. Saba. 1994. The Effect of Long-Term Rent Control on Tenant Mobility. Journal of Urban Economics 35(2): 140-158.
Ault, Richard, and Richard Saba. 1990. The Economic Effects of Long-Term Rent Control: The
Case of New York. Journal of Real Estate Finance and Economics 3(1): 25-41.
Caudill, Steven B. 1993. Estimating the Costs of Partial-Coverage Rent Controls: A Stochastic
Frontier Approach. Review of Economics and Statistics 75(4): 727-731.
Diamond, Rebecca, Tim McQuade, and Franklin Qian. 2017. The Effects of Rent Control Expansion on Tenants, Landlords, and Inequality: Evidence from San Francisco. NBER Working Paper
No. 24181.
Early, Dirk W., and Jon T. Phelps. 1999. Rent Regulations’ Pricing Effect in the Uncontrolled Sector: An Empirical Investigation. Journal of Housing Research 10(2): 267-285.
Early, Dirk. 2000. Rent Control, Rental Housing Supply, and the Distribution of Tenant Benefits.
Journal of Urban Economics 48(2): 185-204.
Fallis, George, and Lawrence B. Smith. 1984. Uncontrolled Prices in a Controlled Market: The Case
of Rent Controls. The American Economic Review 74(1): 193-200.
Gissy, William G. Rent Controls and Homeless Rates. International Advances in Economic Research 3(1): 113-121.
Glaeser, Edward L. 2002. Does Rent Control Reduce Segregation? Harvard Institute of Economic
Research Discussion Paper No. 1985. Cambridge, MA: Harvard University.
Glaeser, Edward L., and Erzo F.P. Luttmer. 2003. The Misallocation of Housing Under Rent Control. American Economic Review 93(4): 1027-1046.
Grimes, Paul W., and George A. Chressanthis. 1997. Assessing the Effect of Rent Control on
Homelessness. Journal of Urban Economics 41(1): 23-37.
Gyourko, Joseph, and Peter Linneman. 1989. Equity and Efficiency Aspects of Rent Control: An
Empirical Study of New York City. Journal of Urban Economics 26(1): 54-74.
Gyourko, Joseph, and Peter Linneman. 1990. Rent Controls and Rental Housing Quality: A Note
on the Effects of New York City’s Old Controls. Journal of Urban Economics 27(3): 398-409.
Honig, Marjorie, and Randall K. Filer. 1993. Causes of intercity variation in homeless. The American Economic Review 83(1): 248-255.
Krol, Robert, and Shirley Svorny. 2005. The Effect of Rent Control on Commute Times. Journal
of Urban Economics 58(3): 421-36.
Levine, Ned, Gene Grigsby, and Allan Heskin. 1990. Who benefits from rent control? Effects on
tenants in Santa Monica, California. Journal of the American Planning Association 56(2): 140-52.

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Linneman, Peter. 1987. The Effect of Rent Control on the Distribution of Income among New York
City Renters. Journal of Urban Economics 22(1): 14-34.
Malpezzi, Stephen. 1996. Housing prices, externalities, and regulation in U.S. metropolitan areas.
Journal of Housing Research 7: 209-241.
Mengle, David L. 1985. The Effect of Second Generation Rent Controls on the Quality of Rental
Housing. Federal Reserve Bank of Richmond, Working Paper No. 85-5. Richmond: Federal Reserve Bank.
Moon, Choon-Geol, and Janet G. Stotsky. 1993. The Effect of Rent Control on Housing Quality
Change: A Longitudinal Analysis. The Journal of Political Economy 101(6): 1114-1148.
Nagy, John. 1995. Increased Duration and Sample Attrition in New York City’s Rent-controlled
Sector. Journal of Urban Economics 38(2): 127-137.
Nagy, John. 1997. Do Vacancy Decontrol Provisions Undo Rent Control? Journal of Urban Economics 42(1): 64-78.
Navarro, Peter. 1985. Rent Control in Cambridge, Massachusetts. Public Interest 78(4): 83-100.
Olsen, Edgar O. 1972. An Econometric Analysis of Rent Control. Journal of Political Economy
80(6): 1081-1100.
Peat Marwick. 1988. A Financial Analysis of Rent Regulation in New York City: Costs and Opportunities: Final Report to the Rent Stabilization Association of New York City, Inc.
Rappaport, Carol. 1992. Externalities, Government Intervention, and Individual Responses: Rent
Regulation and Housing-Market Dynamic. American Economic Review 82(2): 446-451.
Rydell, Peter C., Lance C. Barnett, Carol E. Hillestad, Michael Murray, Kevin Neels, and Robert H.
Sims. 1981. A RAND Note: The Impact of Rent Control on the Los Angeles Housing Market. The
RAND Publication Series Document Number: N-1747-LA. Santa Monica: RAND Corporation.
Sims, David P. 2007. Out of Control: What Can We Learn from the End of Massachusetts Rent
Control? Journal of Urban Economics 61(1): 129-51.
Sims, David P. 2011. Rent Control Rationing and Community Composition: Evidence from Massachusetts. The B.E. Journal of Economic Analysis & Policy 11(1): 1-30.
Turner, Margery A. Housing Market Impacts of Rent Control: The Washington, D.C. Experience.
Urban Institute Report 90-1. Washington, D.C.: The Urban Institute Press.

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