Who Pays for Rent Control? Heterogeneous Landlord Response to San Francisco’s Rent Control Expansion

American Economic Review P&P, 109: 377–380, 2019.
Rebecca Diamond
Tim McQuade
Franklin Qian
AEA PAPERS AND PROCEEDINGS
VOL. 109, MAY 2019 (pp. 377-80)

Using a 1994 law change, we exploit quasi-experimental variation in the assignment of rent control in San Francisco to study which types of landlords bear the burden of decreased rental payments versus substitute away from supplying rent-controlled housing. We find rent control leads to a long-run decrease in the supply of rental housing. This effect is more pronounced among properties managed by corporate landlords versus individual landlords. Raising revenue for rental subsidies through rent control appears to be regressive, since corporations can evade the tax burden of rent control more easily, likely due to their superior access to capital.
 
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