Why do 90% of economists oppose rent control?
Money & Macro · 2026-08-04 · 19 min
https://www.youtube.com/watch?v=yoT76zITRx8Video summary
A review of 92 studies argues rent caps lower rents for current tenants but shrink rental supply, while Auckland’s rezoning helped stabilize rents.
New York’s rent freeze reflects a wider turn toward rent controls in cities including Dublin, Barcelona, Berlin, Amsterdam, and Paris. The video explains why economists distinguish rent caps from price controls on natural monopolies such as water and electricity: most landlords are small owners, not monopolists. Reviewing 92 peer-reviewed studies across 36 countries, it finds rent controls often lower costs for protected tenants, but commonly reduce rental supply, tenant mobility, housing quality, and new construction, while pushing rents up in nearby uncontrolled areas. The proposed alternative is to build more homes, including market-rate, public, and social housing. Auckland’s 2016 rezoning enabled a construction boom and helped stabilize inflation-adjusted rents, unlike Wellington’s sharp increases. Yet surveys show many Americans wrongly expect more housing to raise prices, helping explain politicians’ preference for popular rent caps. The video also questions whether Mayor Mamdani’s narrowly defined subsidized housing plan can be built at scale alongside rent controls.
Chapters
- 0:00The rent control divide: New York freezes rents, but only 2% of economists support controls
- 1:57When price controls work: natural monopolies differ from rental markets
- 5:49What 92 studies found: lower controlled rents but less supply and construction
- 11:04The economists’ solution: build more homes, as Auckland’s 2016 rezoning shows
- 14:05Why cities reject building: 42–43% expect more homes to raise prices
- 15:47Can we do both? Rent controls may hinder construction alongside Mamdani’s housing plan
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