Moderate Rent Controls: A Microeconomic and Public Choice Analysis
Why do people vote for (and against) moderate rent controls? The microeconomic effects of rent controls are complex–they affect both renters and homeowners in many ways, creating a complicated pattern of winners and losers. Renters stand to gain initially from the controlled rents, but competition for scarce housing dissipates these gains. Homeowners are affected by changing housing demand patterns and shifts in property tax burdens. An econometric analysis of the 1980 Seattle, Washington rent control referendum supports the conclusion that voters recognized the microeconomic gains and losses and voted accordingly on this issue. Use of census tract data makes this public choice analysis particularly strong compared to other studies that aggregate voters at the city or county level, possibly missing important intrajurisdiction voting patterns.