Rent controls are a deal with the devil
6 April 2023
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Energy and Environment
Healthcare
Kristian Niemietz writes in The Telegraph
6 April 2023
Economic Theory
Matthew Lesh writes in City AM
IEA Director of Public Policy and Communications Matthew Lesh has written in City AM highlighting the negative impact of rent controls, despite their short-term temptation.
Matthew wrote:
“Rent controls are deceptively attractive and it is easy to see why. An immediate freeze would initially reduce financial risks to the over 1 million people currently renting in London.
“But do not be fooled. Henry Hazlitt’s classic book, Economics in One Lesson, emphasises the importance of ‘looking not merely at the immediate but at the longer effects’ of any policy. Rent controls would worsen the underlying issue, the lack of housing supply, while reducing the quality of accommodation and making London even less accessible to newcomers.
“The result will be hundreds of people lining up for viewings, as was the case last September in Dublin as students scrambled to find an apartment or in Stockholm where it takes an average of 11 years to get a rent-controlled apartment.
“Assar Lindbeck, the socialist Swedish economist, once described rent control as ‘the most efficient technique presently known to destroy a city—except for bombing.’ It ranks somewhere between farce and tragedy that we consistently fail to learn this lesson.”
Read Matthew’s full column here.
Matthew wrote:
“Rent controls are deceptively attractive and it is easy to see why. An immediate freeze would initially reduce financial risks to the over 1 million people currently renting in London.
“But do not be fooled. Henry Hazlitt’s classic book, Economics in One Lesson, emphasises the importance of ‘looking not merely at the immediate but at the longer effects’ of any policy. Rent controls would worsen the underlying issue, the lack of housing supply, while reducing the quality of accommodation and making London even less accessible to newcomers.
“The result will be hundreds of people lining up for viewings, as was the case last September in Dublin as students scrambled to find an apartment or in Stockholm where it takes an average of 11 years to get a rent-controlled apartment.
“Assar Lindbeck, the socialist Swedish economist, once described rent control as ‘the most efficient technique presently known to destroy a city—except for bombing.’ It ranks somewhere between farce and tragedy that we consistently fail to learn this lesson.”
Read Matthew’s full column here.
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