Thread of my thoughts on the NZ Initiative’s “Rent controls: The next mistake in housing policy”.

Firstly, the NZ Initiative concedes that rent control will not affect the overall supply of housing. “However, the model outlined in Figure 1 does not make predictions about overall housing supply, but rather the supply of rental accommodation.”

They argue that instead that rent control will reduce the supply of rentals. IE a bunch of landlords will sell to owner occupiers. I think most people would think that’s actually kind of a good thing.

In spite of that they conclude with “However, the resulting shortage can lead to higher rents than would otherwise have been the case for uncontrolled accommodation.” This is not justified or explained.

Next they argue that “there is evidence that it is in fact older, higher income residents who benefit most from rent controls.” Ok, but is that really a problem though?

Next claim: “Other prospective tenants who may be in greater need of affordable housing face queues, sometimes for decades, or miss out altogether.”

Assuming here that without rent control the people whose need for affordable housing is greatest would be able to afford to live there were it not for the queues. Remember, overall housing supply has not changed.

Because there’s an obvious benefit here too: the people who otherwise couldn’t afford their rent and would have been forced to move to some other town where things are cheaper.

“Rent controls can also reduce the quality of rental accommodation. Landlords unable to recoup costs by raising rents may not invest in maintenance.” “Can” doing some heavy lifting here.

Rent controls often allow for rents to be increased where there have been improvements made to the dwelling. In some cases rent control “can” increase the quality of rentals.

I also feel like this may not be such a big deal here because most landlords already hardly do any maintenance anyway.

“As a result, families may end up living in small apartments while empty nesters live in large homes they do not need” Oh no! Imagine if that happened here in New Zealand! What a nightmare!

“The study found that the beneficiaries of rent control were significantly less mobile than their control group counterparts.” You say less mobile, I say more secure.

“landlords affected by rent control reduced the supply of rental accommodation by 15 percent, likely driving up market rents in the long run.” They may have forgotten that there isnt likely to be an overall reduction in housing by now.

“Indeed, removing rent control boosted Cambridge’s property values by $2 billion between 1994 and 2004.” Sounds like they should have kept the rent control then.

“Finally, evidence suggests rent controls can actually have a regressive effect, rather than help low income households” Having a regressive effect does not mean it does not help low income households.

Here’s the thing. I dont disagree about what most of the consequences of rent control are. Rents will be lower for some people, some landlords will sell, and people in rent controlled homes will move less.

The NZ Initiative just considers this all to be terrible, whereas I just think it would be fine? Nice even?