"New York City mayor-elect Zohran Mamdani swept to victory Tuesday evening on a platform of affordability, anchored by a plan to freeze rents across nearly two million rent-stabilized apartments. But economists, universally, hate rent control. In a 2012 poll of top economists, just 2% agreed that rent-control laws have had "a positive impact" on the supply and quality of affordable housing. The Nobel laureate Richard Thaler even quipped in the survey that the next question should be: "Does the sun revolve around the earth?""
"To most voters, freezing rents looks like common sense: If prices are out of reach, stop them from rising. But to economists, that's like treating a fever by breaking the thermometer: It suppresses the symptom without curing the disease, the persistent shortage of housing. "Freezing rents doesn't fix scarcity," said David Sims, a Brigham Young University economist whose research on Massachusetts rent control remains a touchstone. "It just reshuffles who bears the cost.""
"Sims' work examined the rent-control regime that once governed Cambridge, Mass., where tenants could stay indefinitely at below-market rents. The policy was meant to keep housing affordable, but it led to what he calls misallocation. "People who could do better by moving tend to stay," he told Fortune. "Older households hang onto large units they no longer need, while young families can't find space. Over time, you end up with the wrong people in the wrong apartments.""
Zohran Mamdani won on a platform to freeze rents across nearly two million rent-stabilized apartments. Economists overwhelmingly oppose rent control, with a 2012 poll showing only 2% viewing such laws positively and prominent economists dismissing them. Freezing rents treats price symptoms but fails to address the underlying shortage of housing. Historical evidence from Cambridge, Massachusetts, shows long-term misallocation: below-market stays by tenants, inefficient use of large units, and constrained space for young families. Repeal of controls in 1994 coincided with a 45% rise in property values, reflecting suppressed investment and depressed surrounding values under caps.
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