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Economy

Rent Control: a Reckoning

The eventual drawbacks of rent restriction policies appear to outweigh the benefits to low-income individuals. So, is it time to reform them?
A mixed-income housing project in San Francisco.
A mixed-income housing project in San Francisco.Robert Galbraith/Reuters

Rent control. Advocates say it really helps low-income tenants keep their homes, especially in places where they’re likely to be priced out, helping maintain economic and cultural diversity. Critics say it’s, at best, a mere Band-Aid. So, which is it?

A new working paper published in the National Bureau for Economic Research provides a complicated answer: While these policies are a boon to many low-income tenants who directly benefit, they worsen the affordability crisis in the longterm. “It’s somewhat of a transfer from future tenants to incumbent tenants,” said Rebecca Diamond, an assistant professor of economics at Stanford University, who authored the paper along with colleagues Timothy McQuade and Franklin Qian.