Rent control does not work. That’s one of the most settled issues in economics, one widely accepted across the ideological spectrum. Yet politicians continue to peddle rent control with a seemingly willful ignorance.
Oregon is the most recent state to embrace the rent control orthodoxy. The day after rent control prevailed in Oregon, marchers took to the streets in Olympia, demanding that Washington also succumb to a proven policy failure. But Washington should side with settled economic science, not naïve populism.
Rent control’s failure begins and ends with the most basic concept in economics: supply and demand. When politicians slap an artificial squeeze on prices, a shortage results. A lower price means more people want that good while fewer people produce it.
With rent control, that means less housing. Many landlords will either sell their property or put it to a different use. Meanwhile, inadequate housing supply and pressure for rent-controlled units spill out into the uncontrolled market, where prices escalate.