I’m a socialist now, but I’d say I came to a lot of my conclusions through economics and science as well as labor. I believe in abolishing landlords, and I think that would be a boon to housing. However, I think half measures like rent control actually might hurt instead of help. It’s basically applying the philosophy of landlord abolition within a capitalist system, and without government housing assistance or at least better homeownership funding programs. The whole idea of landlord abolition is to make the price of housing go down because it’s no longer an investment medium for those who have lots of money to hoard it, and then to make the barriers to acquiring a mortgage, more similar to those of what it used to be to acquire a rental agreement. Under this system builders get paid, owner occupants get paid, landlords do not.
Under rent control, we simply make landlord’s lives a little more inconvenient in a system that still expects them to exist. Unless we rent control all the way down to the price of a mortgage payment, which should eliminate landlords, and which I would support, simply inconveniencing landlords is just going to lower housing supply, because currently the housing development chain depends on landlords as middleman. Currently a bank will not give kids with no credit a mortgage, even if they can afford rent. So builders will not get paid without landlords.
Also, unfortunately, what I’m proposing would cause a major economic recession. Housing is currently an investment medium. Owner occupants pay mortgage based on what their house was worth when they bought it. If we tank the housing market, we need government to step in and make it OK on average working people. Also people fear subprime mortgages because of 2008, but again that was really caused by housing being used as an investment medium rather than a human need.
Anyway, I think housing under the current system is way too complex for simple solutions like rent control. The data does not look good on rent control, it reduces housing. I think the best near term solution without true housing socialism is increasing funding to section 8 by a ton. I also think we should eliminate property taxes completely on occupied primary single-family homes, and raise property taxes on second-homes by a lot. Lastly, we should have the federal reserve issue subprime mortgages, and fund the risk directly with taxpayer money, so it doesn’t impact the markets, just like we subsidize farms and medical research. THEN we can rent control landlords out of the market.
It's important to not only engage with theoretical economics but also look at studies in practice.
https://journalistsresource.org/economics/rent-control-regulation-studies-to-know/ is a good overview with four papers on the effects of rent control in different locations in the US. They don't always find that it harms construction! That means something else is going on. We should figure that out and fix that problem while at the same time having rent control to keep people housed.
I live in NYC and looking around me it's clear that sky-high rents that have doubled in a few years are not meaningfully driving new construction. With one exception that is: nearby New Jersey. Jersey City has one of the strongest rent control laws around and is booming.
Why is that? I can't say for sure but I think the biggest one is zoning. NYC almost doesn't allow new construction, so builders don't do much of it, especially if you look at it proportionately to the current population. NYC suburbs in directions other than New Jersey nearly don't build at all because they're controlled by single family homeowners who refuse to allow densification.
So in this context, we can impose rent control and not harm housing because we're already not building in NYC. We should also figure out how to build the housing we need! Maybe once we do that we can reexamine rent control, and maybe it will be needed less. Maybe by then the revolution will be here and we won't need landlords at all...
Landlords have two principal avenues to increase their rate of returns:
Rent control alters the incentives