(I had a long conversation yesterday with Eric Levitz of\u00a0<\/em>Vox about the New York City rent freeze and the economics of rent regulation. I have posted the interview below just as it appeared there<\/a>, for my archives and in case people want to read it without dealing with the paywall.)<\/em><\/p>\n \u00a0<\/p>\n An economist makes the case for Zohran Mamdani\u2019s rent freeze<\/b><\/p>\n A new look at an issue that frequently divides voter and experts.<\/p>\n by Eric Levitz<\/a> July 7, 2026 at 6:00 AM EDT<\/p>\n As America\u2019s housing crisis deepens, policymakers are increasingly turning to an old idea for improving affordability: making large rent increases illegal.<\/p>\n In recent years. Oregon,<\/a> Washington<\/a>, and California<\/a> have enacted statewide rent controls. In 2024, the Biden administration floated a nationwide cap<\/a> on rent increases for large buildings. And last month, New York\u2019s Rent Guidelines Board approved a two-year rent freeze<\/a> on the city\u2019s roughly 1 million stabilized units, fulfilling one of Mayor Zohran Mamdani\u2019s signature campaign promises.<\/p>\n While rent control has long had some appeal to voters, it has historically provoked consternation among economists. In one 2012 survey,<\/a> just 2 percent of economists agreed with the statement that local rent regulations \u201chad a positive impact over the past three decades on the amount and quality of broadly affordable rental housing.\u201d<\/p>\n The reasoning behind such skepticism is simple<\/a>: When you make it less profitable to provide rental housing, people produce less of it. As a result, rent control reduces the supply of housing \u2014 and thus tends to make cities less<\/i> affordable in the long run.<\/p>\n But this orthodoxy may soon be overturned \u2013 or so argues<\/a> J.W. Mason, chair of the economics department at New York\u2019s John Jay College of Criminal Justice and a senior fellow at Groundwork Collaborative, a progressive think tank.<\/p>\n In Mason\u2019s view, the evidence that rent regulations discourage construction<\/a> has been widely overstated: When designed well \u2014 and paired with zoning reforms \u2014 rent controls can protect tenants from displacement without<\/i> reducing the long-term supply of housing.<\/p>\n We spoke this week about the case for (and against) rent control in general and New York City\u2019s policies in particular. Our conversation has been edited for clarity and concision.<\/p>\n Among mainstream economists, conventional wisdom holds that rent control measures are misguided, partly on the grounds that they reduce the long-term supply of housing. In your view, what does that analysis get wrong?<\/b><\/p>\n When we talk about rent regulation, we\u2019re typically talking about markets where there are already very substantial<\/i> constraints on housing supply. Nobody is trying to pass rent regulation in exurban Texas or the Atlanta suburbs, where you have a lot of new housing construction.<\/p>\n Where it\u2019s relatively easy to build housing, rents are going to be closely tied to the cost of building and operating new housing because, if you charge a lot more than that, then you create an opportunity for competitors.<\/p>\n The markets where you have rent regulation are markets like New York City, San Francisco, and a lot of European cities \u2014 places where there\u2019s already really hard constraints on the capacity to build new housing. And in cases like that, where supply is already constrained by land use rules or just by an absolute scarcity of buildable land or by other factors, you\u2019re not going to get any additional limitation on supply from rent regulation.<\/p>\n In that context, owners of existing housing collect rents in the broad, economic sense<\/a> \u2014 income that doesn\u2019t derive from any contribution they\u2019ve made to production, but merely from others\u2019 inability to build. Under those conditions, the only thing rent regulation does is redistribute some of that economic rent from property owners to tenants.<\/p>\n Most critics of rent control oppose restrictive zoning too. So, I think they might say that we should focus on ending the conditions that allow landlords to extract economic rents in the first place, rather than on redistributing them.<\/b><\/p>\n There\u2019s an argument that, if we could achieve deep supply-side improvements in housing, we wouldn\u2019t need rent regulation to the extent that we currently do. And I think that\u2019s a perfectly reasonable argument. But it does not do any good for tenants who are facing displacement today. The fact that you have a different long-term goal does not remove the need for dealing with the short-term problem.<\/p>\n And there are good reasons to think that rent regulation is desirable, even if we think the real problem is on the supply side. For one, I think the politics of dealing with supply issues are much easier if you also have rent regulation. A lot of opposition to addressing supply-side problems is a perception that if you get new development, then that\u2019s going to lead to displacement of people in the areas where development is taking place.<\/p>\n We can debate how true that is. But it\u2019s a very deeply held perception. So, to the extent that you can offer real security to existing tenants, you remove one of the big sources of public opposition to supply-side measures: You don\u2019t need to oppose removing restrictions on new housing because you are locked in. You are safe. Your landlord cannot kick you out to get somebody higher-paying in.<\/p>\n And honestly, I think that politics is very clear here in New York. I think that you would not have gotten the City of Yes<\/a> land-use reforms, or the zoning reforms that passed on the ballot initiatives<\/a> this past year, or a progressive like Zohran Mamdani<\/a> coming out in favor of supply-side measures to increase housing production, if we had not strengthened the rent laws back in 2019<\/a>.<\/p>\n Putting the politics to one side, do you think there is any<\/i> tension between restricting rents and increasing construction? Say a city rolls back some of its restrictions on homebuilding, and new construction stops being effectively capped by zoning rules. If that city adopts rent controls, will that reduce the supply of housing at the margin? Or is that supposed tradeoff entirely illusory, in your view?<\/b><\/p>\n There\u2019s no deterrent effect to many rent regulations, including those in New York City. Obviously, you can hypothetically imagine a much more rigorous form of rent control that could discourage new construction. I\u2019m not going to say that it is impossible for that to happen. I think that we\u2019re just very far from that point.<\/p>\n This is largely because new construction is typically exempt from rent control. In New York City, you are only required to comply with rent regulations if your building is more than 50 years old. And developers aren\u2019t deciding whether to build based on how much rent a project will yield 50 years in the future<\/a>.<\/p>\n The longevity of housing just makes it different from other goods. People often say, \u201cIf you impose a hard cap on milk prices, people will find it less worthwhile to produce milk. And we\u2019re going to have shortages of milk in the stores.\u201d We can debate whether that\u2019s always true. But it\u2019s a reasonable argument, since milk is consumed shortly after it\u2019s produced. So your decision to produce more milk really is based on the price that you can get for that milk today.<\/p>\n But housing is at the opposite extreme. The median building in New York is 80 years old. When that housing was first produced, the price it\u2019s going for today was not a factor.<\/p>\n Now, I should add that in New York City, the buildings with the highest rates of rent regulation are actually newer buildings. But that\u2019s because developers voluntarily<\/i> opt into the rent regulation system, as a condition of getting tax subsidies. At that point, clearly you\u2019re not having a negative effect on supply when this is a voluntary decision.<\/p>\n Is that necessarily true? In theory, the tax subsidies are supposed to encourage housing investment. And developers weigh the benefit of those subsidies against their costs: If you accept them, you need to provide some units at below-market rates. So, if New York City makes providing rent-stabilized units less profitable \u2014 by freezing rents \u2014 then don\u2019t the subsidies become less valuable? And wouldn\u2019t that theoretically make investors slightly less inclined to fund new housing, all else equal?<\/b><\/p>\n Well, we\u2019re seeing more new housing constructed<\/a> in New York City right now than we\u2019ve seen in many decades. So clearly something is working. And maybe what\u2019s working is just that incomes are rising, that demand for housing in the city is rising.<\/p>\n But in my opinion, the tax abatements are badly structured. I really would not support housing development that way. But a huge fraction of new housing that gets built in the city uses these tax credits. So I think clearly they\u2019re attractive to developers. Clearly, it\u2019s a worthwhile trade-off from their point of view.<\/p>\n For critics of rent control, one study <\/b>looms especially large<\/b><\/a>: In 2018, a team of Stanford economists examined the impact of San Francisco\u2019s rent control expansion in the 1990s. And they found that the policy led to a 15 percent reduction in the rental housing supply, which pushed up rents in the city by 5.1 percent. But in my understanding, you think the implications of that research are widely misinterpreted.<\/b><\/p>\n Yeah. I think that\u2019s really a study about poor regulatory design. What it shows is: If you impose strict rent regulations but you don\u2019t restrict people\u2019s ability to convert rental properties to other uses, that may encourage landlords to convert rental housing into condos.<\/p>\n In the study, rental housing supply did not fall because of a decline in new construction. It fell because of condo conversions. And that distinction is important. If you have rental housing that\u2019s converted to condos, that\u2019s not reducing the overall supply of housing<\/i>, but only that of rental<\/i> housing. And it\u2019s not necessarily increasing the cost of housing<\/i>: It may be increasing market rents in the unregulated sector, but decreasing<\/i> the cost of condos for condo buyers.<\/p>\n In any case, a well-designed rent regulation, like New York City\u2019s 2019 reforms, can simply disallow people from moving housing out of the rental market in that way.<\/p>\n Many have argued that rent stabilization in general and New York City\u2019s 2019 reforms in particular have negatively impacted the quality of the housing stock. Specifically, the argument is that landlords respond to rent restrictions by cutting back on maintenance. Is that a serious risk?<\/b><\/p>\n Of all of the concerns that you\u2019ve raised, that is the most legitimate. I don\u2019t think that we\u2019re really seeing that yet. If anything, we\u2019re seeing a reduction in a number of units that seem to have severe maintenance problems in New York. But you know, some people think we should not just have a rent freeze here, but a rent rollback. So, you roll back rents by five, 10, 15, 20, 25 percent, you\u2019ll eventually reach a point at which you have real problems with building owners not doing basic maintenance and buildings falling into disrepair.<\/p>\n I\u2019m not sure what the number is. Clearly there is a number where that happens. But I think we\u2019re a very long way away from that. The vast majority of buildings are renting for much more than their operating and maintenance costs. The Rent Guidelines Board does studies<\/a>. They suggest that the median margin is on the order of 40 or 50 percent.<\/p>\n<\/p>\n