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Cake day: June 6th, 2023

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  • 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…