“[R]ent control appears to be the most efficient technique presently known to destroy a city — except for bombing,” Swedish economist Assar Lindbeck observed in a 1972 book. It has been particularly destructive in New York City:
William Tucker estimates the direct costs of rent control at $2 billion a year, exclusive of the effect of shrinking the property tax base.
A Manhattan Institute study by Henry O. Pollakowski, a housing expert at the Massachusetts Institute of Technology, concluded, “tenants in low- and moderate-income areas receive little or no benefit from rent stabilization, while tenants in more affluent locations are effectively subsidized for a substantial portion of their rent.”
By contrast, a new Pollakowski on the effects of a statewide referendum terminating rent controls in Cambridge, Mass. in place from 1971 to 1994. Pollakowski found that Cambridge deregulation was followed by a boom in housing investment.