Economists have long understood that rent controls have terrible consequences for cities. Less new housing will be built, and the condition of the existing stock will worsen. Ah, but those results are off in the future and politicians will be able to claim immediate credit for their supposed compassion toward renters, who greatly outnumber apartment owners.

In this AIER essay, Raymond Niles looks at the economics of rent control. He writes:

Before the advent of lottery apartments, the city found other ways to severely restrict the construction of new market-rate housing, including zoning laws, which directly prohibit the construction of new housing beyond mandated limits on building height and density. It is simple supply and demand: If the supply of new housing is restricted, the market price of housing will be higher.

The destructive effects of rent control (and other interventions) are a lesson in public-choice theory — concentrated benefits for a few with far greater costs dispersed among the many.

Rent control is one of the many interventionist follies that would have been prevented if the Constitution forbade the feds and states from dictating the terms of private contracts. The Constitution does have a clause saying that the states may not “impair the obligation of contracts,” but the Supreme Court has never seen fit to invalidate coercive mischief like rent-control laws and minimum-wage mandates. Untold economic damage would have been avoided had the Court done so. (For a while, it stood against minimum-wage laws, on other grounds, but FDR cowed it into acquiescing in them and everything else on his interventionist agenda.)