Rent Caps: What the Evidence Says
The city wants to hold rents at 2019 levels. Other places have tried it. Here is what happened.
Berlin’s 2020 rent law froze most rents at their June 2019 level for five years. In 2021, Germany’s Federal Constitutional Court struck the law down, ruling that rent rules are a matter for federal law. The idea did not start in Berlin. New York City has had some form of rent regulation since the 1940s.
Massachusetts voters ended rent control in Boston, Cambridge and Brookline in a 1994 ballot vote, which gave researchers a rare before-and-after. Most economists who study housing are sceptical of rent caps.
San Francisco went the other way in 1994, extending rent control to small apartment buildings built before 1980. Landlords covered by the change cut the rental housing they offered by 25%, often by converting flats to condos. Tenants who already lived in covered buildings were more likely to stay put. Across the whole city, the smaller supply pushed rents up by about 5%.
In Berlin, advertised rents for capped flats fell while the law was in force, but so did the number of flats advertised. A cap tied to a past year rewards people who already have a lease over people still looking for one.
Oregon became the first US state to pass statewide rent control, in 2019. Its law caps yearly increases at 7% plus inflation and exempts buildings less than 15 years old.
Oregon’s law does not stop landlords from resetting the rent when a tenant moves out. Other places have tried shorter freezes. Scotland froze most private rents for a time during the cost-of-living crisis. Supporters say caps protect tenants from sudden rises that force them to move.
Most studies look at rules that limit rises for sitting tenants, not a return to an old rent level. That matters here, because the city’s plan is the second kind. The city has not yet published an estimate of how many flats the cap would cover.