Who Gains and Who Loses?
Existing tenants in rent-controlled accommodations are the principal
gainers from a policy of rent control. As the gap between the controlled
and the free-market rents grows, as it would if housing demand were
growing relative to supply, those who are still lucky enough to live in
rent-controlled housing gain more and more.
Landlords suffer because they do not get the rate of return they expected
on their investments. Some landlords are large companies, and others are
wealthy individuals. Neither of these groups attracts great public
sympathy, even though the rental companies’ shareholders are not all
rich. But some landlords are people of modest means who may have put
their retirement savings into a small apartment block or a house or two.
They find that the value of their savings is diminished, and sometimes
they find themselves in the ironic position of subsidizing tenants who are
far better off than they are.