The quantity of rent-controlled apartments demanded thus becomes 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 rent-controlled two-bedroom apartment on the Upper West Side, after inheriting the lease from her parents—a unit that would rent for three to five times as much on the open market. In Stockholm, Sweden, where strict controls have been enforced for decades, the average wait time for a rent-controlled unit was 9 years by 2021 and may now exceed 20 years.

The supply-side response is also consistent with economic theory. In 1994, San Francisco expanded rent control to small multifamily housing, which was previously exempt. One study shows that the supply of rental accommodation from affected landlords fell by 15 percent, with the number of renters living in such units falling by a quarter. The lower profitability of rental units saw many landlords sell such units as owner-occupied condos instead. A 2007 study of the Boston metropolitan area by economist David P. Sims found the flip side: 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 comprehensively makes the case that price controls do 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 them. If the chapter on why we should have a free market in 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.