Laboratories of Regulation: Understanding the Diversity of Rent Regulation Laws
March 18, 2019 by In an ideal world, research would reveal the effects of various decisions in designing a rent regulation program. However, in reality, there is limited rigorous research on modern rent regulation programs, and even less on the specific features that influence their impact on the housing market. Without policy changes that allow researchers to isolate these effects, it will be challenging to identify effective and efficient reforms. Nonetheless, some jurisdictions are considering changes to elements of their rent regulation programs, and research should closely follow these reforms. While the focus has been on U.S. programs, it would be beneficial to examine programs worldwide to understand what research reveals about them. Jurisdictions contemplating new rent regulation programs or reforming existing ones should carefully consider the range of options available and consult with experts familiar with different programs to understand the implications and unintended consequences of various design elements. They should also consider how their rental markets are evolving and whether their rent regulation programs are keeping pace. For instance, as more single-family homes are rented out, often by companies owning numerous units, the exemption for single-family rentals may no longer be justified in some cities. Similarly, with more tenants using home-sharing platforms to sublet their units for short-term visitors, the interaction between rent regulation and home-sharing regulations may need attention. Additionally, as more jurisdictions fund legal assistance for renters facing eviction, there may be a need to rethink some aspects of rent regulation programs. Given the housing affordability crisis in nearly every major metropolitan area, the pressure to regulate rents is likely to increase in the coming years. Residents are likely to advocate for rent regulation to address concerns about the impact of new housing or other investments on rising rents and potential displacement. Outdated research based on older, less flexible systems will not be persuasive in these debates. Therefore, policymakers and researchers should focus on designing and testing modern rent regulation systems that enhance stability for current tenants while minimizing negative effects on investment in both new and existing rental housing.