Rent Contol: Open-and-Shut Case?

[Brad De Long]

>Seth Ackerman wrote:
>
>>	You follow the urban scene, Doug. What do you think of rent control?
>
>Compared to what? Compared to expropriation of greedhead landlords 
>and their public humiliation? Or to an unregulated market?
>
>Rent control does produce many strange phenomena. Near-identical 
>apartments in my building in Manhattan can rent for $400 or $2400, 
>depending on the vintage of the tenant. The "market" rate for my 
>$950 apartment would probably be over $2000. Needless to say, I'm 
>fond of paying half the "market" rate, but it's a privilege not 
>available to newcomers. I put "market" in quotes because the market 
>rate is the marginal cost of a very scarce commodity; people stay 
>put who might otherwise move, so it's hard to say what a real free 
>market in New York apartments would look like.
>
>Still, anything that keeps a lid on rents is welcome;

But it doesn't keep a "lid on rents": it keeps a lid on rents for 
long-term residents; it raises the effective price of housing for 
people moving to New York.

If you want to privilege long-term inhabitants by giving them rent 
breaks and raise the price of housing to people migrating into the 
city, at least be clear in your mind what you are doing...

Brad DeLong