Rent Control in the Bay Area

We’ve all heard the stories of rent control (government mandated price-controls and restrictions on rented properties such as apartments).  In fact, rent control is the canonical example economists use to demonstrate the effects of price ceilings.

Well, this article from The Bay Citizen explain the consequences economists have long understood to come from rent control.  The TL;DR version of this lesson is this: when prices are set artificially below the natural level of prices (as in this case, controlling rent), then the quantity demanded exceeds the quantity supplied (since consumers want more at the lower price and producers are less willing to supply at the price) and the market will suffer a shortage.  That is precisely what we see here: apartments are being left empty.  The stated aim of rent control is to allow those with a lower income the ability to find and keep apartments.  If they are being left empty, then are we achieving this goal?

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3 Responses to Rent Control in the Bay Area

  1. John says:

    Comment, please, on how SF’s regs compare with Peoples Republic of Cambrodge, MA

    • Jon Murphy says:

      I apologize that it has taken me to long to respond. I do not know to much on the PRC’s regs compare to San Fran. I do know that Cambridge has lots of laws regarding the behavior of people and some amazing tenet laws, but I cannot speak too intelligible to your question. I’ll have to research it some.

  2. John says:

    Did a little research myself. Centcontrol has been repealed in PRC… One for us.

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