The Paletz Law Blog

Rent Control is Never Ever the Answer

February 7th, 2025 | By: Matthew I. Paletz, Esq.

During World War II when people began moving heavily into cities for work associated with the war machine, 80% of rental housing was placed under different forms of rent controls. The reason stated was to help manage housing shortages.  

What happened was that landlords, rather than deal with the threat of restricting potential income, sold the properties instead, ironically opening up new home-buying opportunities.

But as Rent Control mania today enjoys its resurgence, with sweeping local and state government legislation being approved across the country, one has to realize the blatant difference in present conditions compared to the 1940s. Interest rates. With many properties currently held by those who paid 2 to 3 percent interest to obtain them, selling and obtaining another similar property at a  7% interest rate makes zero sense.  C-E-N-T-S. 

The end result in 2025 is that the favorite tool of ‘rent is too high’ advocates in many cities has led to a DECREASE in available rental housing supply. Not only does rent control discourage new construction in areas that have imposed the mandates, but many mom-and-pop property owners may be unloading their apartments because they’ve been forced to abandon the hope that the economic principle of supply and demand provides.  

Plus, think about it. If I tell you that you’ve been capped on rent increases at 6% year to year, what level do I think you’re going to raise the rent to? Of course – 6%.  This has become an issue in other countries, too.  For instance, a friend of mine told me about a 9% rent control mandate in socialist Colombia, South America. Guess what the landlords raise the rent to every year?

Rent control doesn’t work. Keeping rents reasonable? No. An incentive for property owners to keep their rentals? No. A device leading to more affordable housing in 2025? Nope. 

Here’s what rent control DOES do.  It takes away potential income for maintenance, upgrades and landscaping. It takes away the incentive for landlords to hold properties long-term and not be able to take advantage of the lack of home inventory.  

Rent control might have seemed like a good idea in 1941, but in 2025, it’s a wrongheaded means of forcing landlords to set rates below market value and in turn, discourages future construction.   

The Bottom Line: We all need to be more active in letting our elected representatives know what these ill-conceived advocacy decisions mean for the future of property ownership.