A Paternalist’s Mistake: Rent Control

Miguel ARIAS, Christine ANDERSON, Walter BLOCK

Abstract


Abstract

Rent control, to the economically uninitiated, sounds like a good idea. After all, given that poor people spend a disproportionate percentage of their incomes on housing, what policy could possibly be of more help to them than to lower their rents? Profit-seeking landlords can hardly be expected to do so on their own. Their inability to undertake so public-spirited a policy thus constitutes a “market failure,” and only government can ride to the rescue the suffering masses. This at least is the story widely told by journalists, clergy, teachers, etc. The present paper is an attempt to shed some light on the very opposite perspective: that rent controls lower the supply of residential rental housing, and thus hurt the poor, the very people supposedly helped by this unwarranted legislation.

 

Key words: Price control; rent control; housing; profits; shortages.

JEL: R31.

Keywords


Price control; rent control; housing; profits; shortages

Full Text:


References


Alson, R.M., Kearl, J.R., & Vaughan, M.B. (1992). Is There a Consensus Among Economists in the 1990’s? American Economic Review, 82(2), 203–209. Anderson, W.L. (2000). The dangers of smart growth. The Free Market, May 28, 18(2), [Retrieved from]. Ault, R. (1981). Advantages and disadvantages of rent, rent control, in Rent Control: Myths & Realities, W.E. Block & E.O. Olsen, (Eds.), Vancouver: The Fraser Institute, pp. 283-319. [Retrieved from]. Barton, D.M., & Olsen, E.O. (1976). The benefits and costs of public housing in New York City, Institute for Research on Poverty, Discussion Papers, No.372 (Madison: University of Wisconsin), pp. 18-30. Becker, G. (1957). The Economics of Discrimination, Chicago: The University of Chicago Press Block, W.E. (1993). On rent control, D. Henderson, (Ed.), The Fortune Encyclopedia of Economics, New York: Warner Books, pp. 421-425. [Retrieved from] or [Retrieved from]. Block, W.E. (1996). Hayek's Road to Serfdom, Journal of Libertarian Studies: An Interdisciplinary Review, 12(2), 327-350, [Retrieved from]. Reprinted in Ama-gi: Journal of the Hayek Society at the London School of Economics, 1(1), 22-25. Block, W.E. (2000). Watch your language, February 21. [Retrieved from]. Block, W.E. (2002). All government is excessive: A rejoinder to ‘in defense of excessive government’ by Dwight Lee, Journal of Libertarian Studies, 16(3), 35-82. [Retrieved from]. Block, W.E. & Gordon, D. (2016). Civil War. April 8. [Retreved from]. Block, W.E. (2016). Rent Control. The Concise Encyclopedia of Economics. N.p., 2008. Web. 30 Apr. 2016. Bovard, J. (2000). HUD’s Biggest Farce? The Free Market. November. 18(11), [Retrieved from]. Cohen, A. (2016). What if the supreme court kills rent control? TIME. 19 Mar. 2012. Web. 30 Apr. 2016. Dizikes, P. (2016). The 'great rent wars' of New York. MIT News. N.p., 21 Oct. 2013. Web. 28 Apr. 2016. Edwards, J. (2015). No, rent control does not work - it actually benefits the rich and hurts the poor. December 3. [Retrieved from]. Gale Encyclopedia of U.S. (2016). Emergency price control act. Encyclopedia.com. HighBeam Research, 1999. Web. 28 Apr. 2016. Epstein, R.A. (1985). Takings: Private Property and the Power of Eminent Domain, Harvard University Press, Cambridge, Massachusetts and London, England. Duxbury, N. (2013). Iron Lady’s right to buy and economic policies had far-reaching impact; Social landlords reflect on Thatcher’s legacy.” April 12. [Retrieved from]. Friedman, M., Von Hayek, F.A., Kalymon, B., Block, W. & Olsen, E.O. (1981). Rent Control, Myths & Realities: International Evidence of the Effects of Rent Control in Six Countries. Vancouver, B.C., Canada: Fraser Institute. Gallagher, M. (2016). The advantages & disadvantages of a rent-controlled apartment. Home Guides. Demand Media, n.d. Web. 30 Apr. 2016. Gamble, A. (1988). Privatization, Thatcherism, and the British State, Journal of Law and Society. 16(1), 1-20. doi. 10.2307/1409974 Gulliver, K. (2013). Thatcher's legacy: her role in today's housing crisis; Margaret Thatcher made a huge impact on the housing sector during her time in office, and we can still feel the effects today. The Guardian. April 17. [Retrieved from]. Hayek, F.A. (1981). Repercussions of Rent Restrictions, Rent Control: Myths & Realities, W.E. Block & E.O. Olsen, (Eds.), Vancouver: The Fraser Institute, pp. 172-188. [Retrieved from]. Hazlitt, H. (2008[1946]). Economics in One Lesson. Auburn, AL: Mises Institute. [Retrieved from]. Higgs, R. (1992). Wartime prosperity? A reassessment of the U.S. economy in the 1940s. The Journal of Economic History. 52(1), 41-60. doi. 10.1017/S0022050700010251 Holcombe, R.G. (1995). Public Policy and the Quality of Life. Westport, CT: Greenwood Press. Jacobs, J. (1961). The Death of Life of Great American Cities, New York: Modern Library Jenkins, B. (2009). Rent control: Do economists agree? A Journal of the American Institute for Economic Research, 6(1), 73-112. Lindbeck, A. (1972). The Political Economy of the New Left, New York: Harper and Row; cited in Rydenfelt, S. The Rise, Fall and Revival of Swedish Rent Control, in Rent Control: Myths and Realities, W.E. Block & E. Olsen, (Eds.) Vancouver: The Fraser Institute, 1981, pp. 213, 230. London, R.A. (2015). The spectre haunting San Francisco, The Economist, Apr 16. [Retrieved from]. Mankiw, N.G. (1998). Principles of Microeconomics. South-Western, Cengage Marsh, D. (1991). Privatization under Mrs. Thatcher: a review of the literature. Public Administration, 69(4), 459–480. doi. 10.1111/j.1467-9299.1991.tb00915.x/abstract Milligan, B. (2013). Right-to-buy: Margaret Thatcher's controversial gift. BBC News. April 10. [Retrieved from]. Myrdal, G. (1965). Opening address to the council of international building research in Copenhagen, cited in ”Dagens Nyheter (Swedish Newspaper), 25 August 1965, p. 12; cited in Rydenfelt, Sven, "The Rise, Fall and Revival of Swedish Rent Control," in Rent Control: Myths and Realities, Walter E. Block and Edgar Olsen, eds., 1981. Vancouver: The Fraser Institute, p. 224; cited in Block, Walter. 1981. “Preface.” Rent Control: Myths and Realities, W.E. Block & E. Olsen, (Eds.), 1981. Vancouver: The Fraser Institute, p. xiv. People, (2016). Pros & cons of rent control. People. Web. 30 Apr. 2016. The Economist, (2015). Do rent controls work? The Economist Newspaper, 30 Aug. 2015. Web. 29 Apr. 2016. [Retrieved from]. The New York Times, (1985). Rent control forever. 27 May 1985. Web. 30 Apr. 2016. Will, G.F. (2012). Rent control laws: Foolish and unconstitutional. Washington Post. 15 Feb. 2012. Web. 30 Apr. 2016. Willis, J.W. (2016). A short history of rent control laws. Cornell Law Review, 36(1), 54-90. Wolf, J. (1991). State power and ideology in Britain: Mrs Thatcher's privatization programme. Political Studies. 39(2), 237–252. doi. 10.1111/j.1467-9248.1991.tb01365.x




DOI: http://dx.doi.org/10.1453/jepe.v3i4.1058

Refbacks

  • There are currently no refbacks.


Bookmark and Share


.......................................................................................................................................................................................................................................................................................................................................

Journal of Economics and Political Economy - J. Econ. Pol. Econ. - JEPE - www.kspjournals.org

ISSN: 2148-8347

Editor: jepe@ksplibrary.org   Secretarial: secretarial@ksplibrary.org   Istanbul - Turkey.

Copyright © KSP Library