I asked ChatGPT the following question:
What are the major effects of rent control on the quantity and quality of housing in the city where the rent control is imposed?
Here’s the answer I got back:
Rent control is a policy that limits the amount by which landlords can increase the rent for a rental property. The major effects of rent control on the quantity and quality of housing in a city depend on a variety of factors, including the specific details of the rent control policy, the local housing market, and the overall economic conditions of the city.
One potential effect of rent control is that it may reduce the quantity of rental housing available, as landlords may be less willing to invest in maintaining or improving their properties if they are unable to charge higher rents to cover the costs. This could lead to a decline in the overall quality of rental housing in the city. Rent control may also discourage new construction of rental housing, as developers may be less likely to build new properties if they are unable to charge market-level rents.
Except for the “mays,” this doesn’t seem too bad, right?
Unfortunately, I didn’t quote the whole thing. ChatGPT goes on to say:
On the other hand, rent control can also have positive effects on the quantity and quality of housing in a city. It can help to stabilize rents and prevent rapid rent increases, which can make housing more affordable for low-income residents and help to reduce the risk of homelessness. Rent control can also incentivize landlords to maintain and improve their properties, as they may be more likely to do so in order to retain their current tenants and avoid vacancies.
Overall, the effects of rent control on the quantity and quality of housing in a city can be complex and dependent on a variety of factors. It is important to carefully consider the potential impacts of rent control policies before implementing them.
“Rent control can also incentivize landlords to maintain and improve their properties, as they may be more likely to do so in order to retain their current tenants and avoid vacancies.” Seriously?
Keeping rents below where they would otherwise be gives landlords an incentive to maintain and improve their properties? The opposite is the truth. And they would have no trouble retaining current tenants and avoiding vacancies.
I see a number of my younger economics professor friends worrying on Facebook about how they’ll be able to grade students on written take home tests. Of course, one answer is: Don’t give written take home tests. But if this answer on rent control is any indicator, grading students shouldn’t be much harder than it currently is.
For a good piece on rent control, see Walter Block, “Rent Control,” in David R. Henderson, ed. The Concise Encyclopedia of Economics.
