Rent Control and Housing Investment: Evidence from Deregulation in Cambridge, Massachusetts

Would ending rent control in New York City lead to a significant increase in housing quality for the nation’s largest city? According to a new study by Massachusetts Institute of Technology (MIT) housing economist Henry Pollakowski, the answer is yes. The recently released study–the latest addition to a growing body of economic literature about the shortcomings of rent control–is titled Rent Control and Housing Investment: Evidence from Deregulation in Cambridge, Massachusetts. It finds that investment in Cambridge increased by approximately 20 percent compared to what it would have been under rent control, and that both affluent and modest income neighborhoods experienced an "investment boom" after rent control was lifted in 1994. Because Cambridge’s housing stock is very similar to the Big Apple’s, the study suggests that New York City’s housing quality would increase similarly if New York ended rent control.

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