The Supremacy of Ryan Bourne – Econlib

As a result, the demand for rent-controlled apartments is becoming enormous. In New York City, some old rent-controlled units have become family heirlooms. A woman went viral on TikTok in 2021 after showcasing her redecorated $1,300-a-month two-bedroom apartment on the Upper West Side after inheriting her parents’ lease — an apartment that would rent for three to five times as much on the Upper West Side. open market. In Stockholm, Sweden, where strict controls have been in place for decades, the average wait time for a rent-controlled unit was nine years in 2021 and can now exceed 20 years.

The supply-side response is also consistent with economic theory. In 1994, San Francisco expanded rent control to small multifamily properties, which had previously been exempt. One study shows that the supply of rental properties from affected landlords has fallen by 15 percent, while the number of tenants living in such properties has fallen by a quarter. The lower profitability of rental units led many landlords to sell such units as condos instead. A 2007 study of the Boston metropolitan area by economist David P. Sims found the downside: Ending rent controls increased the supply of rental housing.

This is from Jeffrey Miron and Pedro Aldighieri, ‘Under Rent Controls, Everyone Pays’, in Ryan A. Bourne, ed., The War on Prices: How Popular Misconceptions About Inflation, Prices, and Value Create Bad Policy. The book comes out today and you can order it on Amazon.

Here’s my blurb for the book:

“The War on Prices is a fantastic book. It makes comprehensively clear that price controls cause great harm, often to the people they are supposed to help. Particularly good are the chapters on rent controls, price controls on oil and natural gas, and so-called junk fees, which are really fees to solve problems that would exist without these controls. If the chapter on why we should have a free market for water were taken to heart, my fellow Californians and I would be much better off. Read this book and learn.” – David R. Henderson, research fellow at the Hoover Institution and editor of The Concise Encyclopedia of Economics.