Monday, January 8, 2018

The Effects of Rent Control Expansion on Tenants, Landlords, and Inequality: Evidence from San Francisco

By Rebecca Diamond, Timothy McQuade, Franklin Qian.

"NBER Working Paper No. 24181
Issued in January 2018
NBER Program(s):Labor Studies, Public Economics

We exploit quasi-experimental variation in assignment of rent control to study its impacts on tenants, landlords, and the overall rental market. Leveraging new data tracking individuals’ migration, we find rent control increased renters’ probabilities of staying at their addresses by nearly 20%. Landlords treated by rent control reduced rental housing supply by 15%, causing a 5.1% city-wide rent increase. Using a dynamic, neighborhood choice model, we find rent control offered large benefits to covered tenants. Welfare losses from decreased housing supply could be mitigated if insurance against rent increases were provided as government social insurance, instead of a regulated landlord mandate."

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