The jury is out. Rent controls, while sounding like a good way to provide affordable housing, does the opposite. According to an opinion editorial in the Houston Chronicle, rent controls reduce the supply of housing where they are in place. Why? Because developers see no incentive to build more housing that is subject to these controls. In addition, economists say that there are no income rules for those living in rent-controlled units, ensuring low turnover and allowing those who are affluent to continue to live in the rent controlled unit. Further, the housing stock around the city continues to be in high demand with rents skyrocketing for everyone else.
So what do economists say is the answer to reducing the cost of housing? Build more housing stock to increase supply and offer subsidies to the smaller number of low-income households who can’t afford a decent place to live.