Rent control is an enemy of people finding affordable, decent housing and of capitalism itself.
When I was in college during the early ’70s, I paid $249/month for a rent-controlled apartment in Silver Spring, Md. Despite near galloping inflation, my rent only reset from $249 to $257 at that time. Being 19 years old, I loved it and thought he hit the jackpot. But if something broke in the apartment, nothing ever got fixed because the owner didn’t have enough money.
When you interfere with the free market by dictating rents, owners have no incentive to invest or otherwise fix the property up. As a young person, I didn’t understand the cause-and-effect relationship between rent control and poor living conditions. But now I do.
New York is a case study in the drawbacks of rent control. Whenever you try to fix the price — even though you think you’re doing something nice for people — you’re really just asking for trouble.
Tenants in rent control cities across the country are probably dancing a jig because the Supreme Court Tenants happy Supremes choose not to hear a rent control case and turned away a challenge to rent control. But the reality under rent control is that tenants live in a dump because you remove economic incentives from the marketplace.
So while rent control is a very popular stance against “The Man,” the ultimate consequence is you suffer and you distort the market.
Editor’s note: This segment originally aired April 30, 2012.