The Redistribution of Housing Wealth Caused by Rent Control

96 Pages Posted: 27 Mar 2022 Last revised: 24 Sep 2023

See all articles by Kenneth R. Ahern

Kenneth R. Ahern

University of Southern California - Marshall School of Business; National Bureau of Economic Research (NBER)

Marco Giacoletti

Marshall School of Business

Multiple version iconThere are 3 versions of this paper

Date Written: May 19, 2022

Abstract

This paper studies the effects of rent control on the housing wealth of renters, landlords, and homeowners. Over the nine months following the passage of rent control in St. Paul, Minnesota in 2021, average property values fell by 4.4% to 5.8%. Leveraging administrative parcel-level data, we show that upper-income renters gained more than lower-income renters. In contrast, small landlords lost the same as large landlords. Owner-occupants' wealth also fell significantly, due to both direct capitalization effects and negative externalities. These results provide the first evidence on the heterogeneous wealth effects of a wave of new rent control laws.

Keywords: Rent control, real estate valuation, wealth transfers, externalities

JEL Classification: D61, D62, G51, H23, R23, R31, R32, R38

Suggested Citation

Ahern, Kenneth Robinson and Giacoletti, Marco, The Redistribution of Housing Wealth Caused by Rent Control (May 19, 2022). Available at SSRN: https://ssrn.com/abstract=4061315 or http://dx.doi.org/10.2139/ssrn.4061315

Kenneth Robinson Ahern (Contact Author)

University of Southern California - Marshall School of Business ( email )

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Los Angeles, CA California 90089
United States

HOME PAGE: http://www-bcf.usc.edu/~kahern/

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
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Marco Giacoletti

Marshall School of Business ( email )

701 Exposition Blvd
Los Angeles, CA California 90089
United States

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