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Marko's avatar

You’re looking at the wrong metric, really. Obviously rent control controls rent where it has jurisdiction. The problem is that it changes the sample set, so it has side effects outside of those to whom it applies. Under rent control some housing that would otherwise be supplied in a particular location is not supplied. Whoever would have lived in that housing instead must continue to demand housing where they currently live, thus raising the rent there—but this effect is not captured in the rent controlled jurisdiction. For example, rent increases often coincide with an influx of higher income people moving to a neighborhood or city. Preventing rent increases prevents these people from moving in. Which means the net effect is that they consume more housing where they currently live, raising rents there, or preventing them from falling. Sadly this usually means they live in a place they don’t prefer, and maybe even one where they are less helpful to society due to lack of capital they can skillfully operate. Misallocation of labor due to inability to move into more economically productive regions is a massive, under-the-radar problem. So while your logic is certainly correct about the effects of rent control on the people to whom it directly applies, it misses the point, since much of the harm it does is to people who are not paying rent in the rent-controlled city, but otherwise would have been.

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Matt's avatar

The ACT has legislated limits in rent increases for existing tenants (rental CPI +10%). I suspect the law is not very effective because it relies on tenants pushing back against proposed increases. My guess is most tenants don't know about the limits, and many of those who do judge (probably correctly) that they'll be worse off if they push back

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