The Manhattan Institute’s Howard Husock explains why rent control failed in New York, and why it’s destined to fail if adopted in Chicago.
If the state were to succumb to the temptation to rein in rents by law, Chicagoans can expect not a solution to housing problems but, rather, a whole new set of problems, also known as unintended consequences.
First, there is no guarantee that low-income residents will benefit. Indeed, property owners whose rental income is limited have a strong incentive to rent to those they can be more certain will pay — those with high incomes and good credit scores.
That’s exactly what’s happened in New York, where a study by New York University’s Furman Center for Real Estate and Urban Policy found that in the most desirable parts of Manhattan, the incomes of rent-controlled households were “higher than the median income of market-rate tenants” in most other New York neighborhoods. Anyone who’s ever lived in the city knows someone who has a ridiculously high salary and pays ridiculously low rent, thanks to rent control.
Read more here.
