Advisory Center for Affordable Settlements & Housing

Document Download Download
Document Type General
Publish Date
Author Working is in progress in ACASH
Published By Check Laterr
Edited By
Uncategorized

Rent Regulation Conceptual and Comparative Analysis

Rent regulations can take many forms and have different purposes. It is argued that the often-used distinction between first- and second-generation rent control is too crude to be useful. Five main types of rent control are identified instead. The first dimension concerns whether the control covers rent changes for sitting tenants or rents generally. The second dimension is whether the aim is to protect the tenants against rents over the market level, against sudden big increases in rents or if the aim is to keep rents permanently below market levels in attractive areas. The typology is used to classify and compare the rent control systems in a number of European countries and North American cities. It is also used to describe typical patterns of change from ‘harder’ to ‘softer’ rent controls. Economists are often very critical of rent control, but in the theoretical literature there has in recent years been a tendency to revisionism (see e.g. Arnott 1995; Anas 1997; and Keating et al. 1998). A distinction is made between what is called first- and second-generation systems of rent control, between ‘hard’ and ‘soft’ rent control. The first-generation controls were nominal rent freezes, while the second-generation controls are more flexible and allow nominal rent increases in a number of situations. Arnott’s point is that the economists’ critique might be correct in relation to first-generation rent control, but it is not obvious that the arguments are relevant against second-generation rent control: ‘since second-generation rent controls are so different, they should be evaluated largely independently of the experience with first-generation rent controls’ (Arnott 1995:102). Given the specific features of the rental housing market: ‘a well-designed rent control can be beneficial (Arnott 1995: 99).

Leave a Reply

Your email address will not be published. Required fields are marked *