A critique of the Communication Workers Union's rent control proposals

Introduction:

Rent controls are firmly back on the political agenda. At the national level the reintroduction of rent controls is now official Labour Party policy. At the London level Mayor Sadiq Khan calls for their reintroduction as well. Politicians, however, are in this case merely following a shift in the Overton Window which has already happened. In recent years, various high-profile authors, such as Owen Jones (2014) and Danny Dorling (2014), have made the case for bringing back rent controls in one form or another, as have various campaign groups and national media outlets.

However, no matter how popular they are, rent controls are not and could not be a solution to the UK’s housing crisis. This paper will reiterate the theoretical and empirical case against rent controls, and will then move on to suggest an alternative which would genuinely address the problem of escalating rents. It will use the CWU report as a starting point. Most authors who call for rent controls do not present a detailed policy argument. They merely describe the problem of high rents, and then present rent controls as a self-evident solution. They tend to see the case for rent controls as so obvious that it requires no further explanation, and assume that opponents of rent control are either acting in bad faith, or are just not interested in the problem.

This paper featured in City AM and author Kristian Niemietz appeared on BBC Radio Scotland to discuss the report’s findings.

Head of Health and Welfare

Dr Kristian Niemietz joined the IEA in 2008 as Poverty Research Fellow, becoming its Senior Research Fellow in 2013 and Head of Health and Welfare in 2015. Kristian is also a Fellow of the Age Endeavour Fellowship. He studied Economics at the Humboldt Universität zu Berlin and the Universidad de Salamanca, graduating in 2007 as Diplom-Volkswirt (≈MSc in Economics). During his studies, he interned at the Central Bank of Bolivia (2004), the National Statistics Office of Paraguay (2005), and at the IEA (2006). In 2013, he completed a PhD in Political Economy at King’s College London. Kristian previously worked as a Research Fellow at the Berlin-based Institute for Free Enterprise (IUF), and at King's College London, where he taught Economics throughout his postgraduate studies. He is a regular contributor to various journals in the UK, Germany and Switzerland.


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