Rent Control

Abstract

Rent control is frequently cited by writers of elementary economics textbooks as an example of a price control policy which, by restricting price below its equilibrium level, can be expected to result in an unsatisfied excess demand for housing and a reduction in its supply.¹ At a more polemical level, there are a number of tracts which relate these general theoretical predictions to various empirical indicators of housing shortage and other alleged deleterious effects of rent control. Literature of this type usually contains a recommendation for a return to some form of unrestricted free market in rented housing.² At the other end of the spectrum, a very different approach has been adopted by writers on social administration. For the most part, they have been extremely wary about the generality of economic theorising and have preferred to proceed by employing detailed empirical analyses of housing policy and market behaviour.³