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

Abstract

Using a 1994 law change, we exploit quasi-experimental variation in the assignment of rent control in San Francisco to study its impacts on tenants and landlords. Leveraging new data tracking individuals’ migration, we find rent control limits renters’ mobility by 20 percent and lowers displacement from San Francisco. Landlords treated by rent control reduce rental housing supplies by 15 percent by selling to owner-occupants and redeveloping buildings. Thus, while rent control prevents displacement of incumbent renters in the short run, the lost rental housing supply likely drove up market rents in the long run, ultimately undermining the goals of the law. (JEL R23, R31, R38)

Real estate rental market: a 10-year bibliometric-based review

“…Regulation of the real estate rental market. Mature RERMs are commonly regulated by necessary policies, such as a rent control policy (Diamond et al, 2019;Kattenberg & Hassink, 2017), rent supplement schemes (Blessing, 2016;Watson & Corrigan, 2019), and regulation of rental contracts (Huisman, 2016;Moon, 2018). In emerging countries, the RERM may be immature, imperfect, and also lack sufficient regulations and policies.…”

The Future of Housing: Policy Scenarios

“…In the long run, higher house prices and lower supply impede access to home-ownership, increase both rents and home prices, and are thereby likely to offset short-term benefits for rent-paying low-income households. The supply distortion stemming from tight rent regulation can also exacerbate speculative bubbles, resulting in greater economic instability (Cournède, Sakha and Ziemann, 2019 [17]). Tight rent control can also contribute to a homeownership bias.…”

Rental legislation and the changing Icelandic rental market

“…Rents lower than their market level may for example be counteracted by demands of monetary compensation from landlords when tenants move in, so called key money (Malpezzi, 1988, Kopsch, 2019b. It may also result in tenure conversions where rental apartments are instead sold to owner occupiers (see Diamond et al 2019;Donner and Kopsch, 2018;Kopsch, 2019b;Turner and Malpezzi, 2003).…”