Do Rent Increases Reduce the Housing Supply Under Rent Control? Evidence from Evictions in San Francisco

Abstract

Rent control balances strong tenant protections with supply-side incentives for landlords. However, cities with rent control are also some of the United States' most unaffordable, prompting questions about how well these incentives are working. I examine how controlled landlords change their housing supply in response to price increases using a well-identified hyperlocal demand shock: the privately operated commuter shuttle systems in San Francisco. Controlled landlords increased market withdrawal filings and became less likely to create vacancies via evictions in response to a shuttle stop placement. Policies raising barriers to market withdrawals prompted controlled landlords to respond by increasing their at-fault evictions.

Pictures are Worth Many Words: Effectiveness of Visual Communication in Dispelling the Rent–Control Misconception

“…In paragraphs six to eight and in the first sentence of paragraph nine, we explain the negative effects of rent controls as shown by the scientific evidence (third element). In our case, we explain the negative, unintended consequences of rent controlswaiting lists, black market, poor maintenance, supply reduction-as shown in many empirical studies (Malpezzi, 1998;Sims, 2007;Mora-Sanguinetti, 2011;Andersson and Söderberg, 2012;Kattenberg and Hassink, 2017;Asquith, 2019;Diamond et al, 2019a,b;Kholodilin and Kohl, 2020;Hahn et al, 2021). Regarding the fourth refutational element (connecting with person's values), we (i) refer to the participant's potential fairness concern (see the first three sentences in paragraph four and the last sentence in paragraph nine), (ii) give the example of Stockholm in Sweden, a society with strong fairness concerns, and (iii) cite the study of Swedish researchers Andersson and Söderberg (2012) about the negative effects of rent control there.…”

“…This high consensus stems from the abundant empirical evidence on this subject (see, for instance, Diamond et al (2019a) and Kholodilin and Kohl (2020)). Although rent control may have positive effects for a subset of tenants because their rents will be low, or grow less, relative to market rents (Sims, 2007), both total quantity of rental housing available and quality of controlled housing falls (Sims, 2007;Mora-Sanguinetti, 2011;Asquith, 2019;Diamond et al, 2019a; Hahn 1 For instance, in the UK the support for rent controls reached 71% in a poll conducted in December 2019 by Ipsos MORI, with only 9% of people opposing them. This is the most supported policy among other housing policies indicated in the same survey.…”