Short/simple answer: everyone loses in the long run.
Last year, I shared here a NBER Working Paper by Rebecca Diamond (Stanford) and colleagues on the effects of rent control on tenants, landlords, and inequality. This issue always makes a comeback and since the paper has has now been published on AER, I thought it would be good to post about this study again. Thanks Max Roser and Carlos Goes for the pointers
Diamond, Rebecca, Tim McQuade, and Franklin Qian. 2019. The Effects of Rent Control Expansion on Tenants, Landlords, and Inequality: Evidence from San Francisco. American Economic Review, 109 (9): 3365-94. [ungated version of the paper]
Using a 1994 law change, we exploit quasi-experimental variation in the assignment of rent control in San Francisco to study its impacts on tenants and landlords. Leveraging new data tracking individuals' migration, we find rent control limits renters' mobility by 20 percent and lowers displacement from San Francisco. Landlords treated by rent control reduce rental housing supplies by 15 percent by selling to owner-occupants and redeveloping buildings. Thus, while rent control prevents displacement of incumbent renters in the short run, the lost rental housing supply likely drove up market rents in the long run, ultimately undermining the goals of the law.
