Rent control has material negative economic consequences

Well, that's useful.  

Rent control is a much favored policy by central planners and those obsessed with engineering equality and equity.  And indeed, it is obviously effective for some in the very near term - i.e. if you are one of the few who manage to get a rent controlled unit.

On the other hand, economists, and more empirical social observers, have pointed the many downsides of rent control - corruption, degradation of housing stock, depressed construction, rising rents on non-rent controlled units, etc.  

As with any hot button coercive social policy, there have been lots of studies, more or less well designed, reaching a range of conclusions, over quite a long period of time.  The pro-rent control crowd can point to their favored studies as can the anti-rent control crowd.  

But on balance, across all the studies, what does the evidence tell us?  Is rent control beneficial and effective?  

As always, you have to begin by defining terms.  Beneficial to whom (renters or owners, inner city or suburbs, current renters versus future renters, etc.)?  Effective at achieving what ends (increasing or reducing housing stock, urban density, quality of housing stock, value of housing stock, etc.)?

Someone has now done the hard work of defining terms and then looking at all the studies.  From Rent control effects through the lens of empirical research: An almost complete review of the literature by Konstantin A. Kholodilin.  From the Abstract:

Rent control is a highly debated social policy that has been omnipresent since World War I. Since the 2010s, it is experiencing a true renaissance, for many cities and countries facing chronic housing shortages are desperately looking for solutions, directing their attention to controling housing rents and other restrictive policies. Is rent control useful or does it create more damage than utility? To answer this question, we need to identify the effects of rent control. This study reviews a large empirical literature investigating the impact of rent controls on various socioeconomic and demographic aspects. Rent controls appear to be quite effective in terms of slowing the growth of rents paid for dwellings subject to control. However, this policy also leads to a wide range of adverse effects affecting the whole society.

His conclusion is more ambiguous than the findings.  The conclusion:

In this study, I examine a wide range of empirical studies on rent control published in referred journals between 1967 and 2023. I conclude that, although rent control appears to be very effective in achieving lower rents for families in controlled units, its primary goal, it also results in a number of undesired effects, including, among others, higher rents for uncontrolled units, lower mobility and reduced residential construction. These unintended effects counteract the desired effect, thus, diminishing the net benefit of rent control. Therefore, the overall impact of rent control policy on the welfare of society is not clear.

Moreover, the analysis is further complicated by the fact that rent control is not adopted in a vacuum. Simultaneously, other housing policies — such as the protection of tenants from eviction, housing rationing, housing allowances, and stimulation of residential construction (Kholodilin 2017; Kholodilin 2020; Kholodilin et al., 2021) — are implemented. Further, banking, climate, and fiscal policies can also affect the results of rent control regulations.

Nevertheless, at least ideally, policy makers should take into account the multitude of these effects and their interactions when designing an optimal governmental policy. Researchers would readily support this by providing their expertise.

But the real meat is in the Empirical findings on rent control effects section.  It is interesting that crime is not really addressed in the study, other than in one study.  Anecdotally, rent controlled properties are often associated with areas of increased crime which would be a major negative externality.  Existing research seems to support that there are material crime effects associated with rent control.   There is no discussion for the omission.

Lots of nuance and careful framing and therefore should be read in the original but the main points are:

Rent control is quite effective in capping rents. 

Rent control leads to higher rents for uncontrolled dwellings. 

The waiting queues become longer and would-be tenants must spend more time looking for a dwelling.

The average effect of rent control on controlled rents is -9.4 %, while that on uncontrolled rents is 4.8 %. 

The impact on residential mobility appears to be quite clear: nearly all studies indicate a negative effect of rent control on mobility. 

Approximately two-thirds of the studies indicate a negative impact [on new residential construction and supply]

Rent control leads to a deterioration in the quality of those dwellings subject to regulations. 

Concluding the empirical section with:

Thus, empirical investigations do substantiate the hypotheses derived from the theoretical literature regarding the effects of rent control. While rent control does succeed in reducing rents within controlled dwellings, it also generates several adverse consequences that work against its intended purpose.

Existing renters are clear immediate beneficiaries.  Everyone else loses from rent control including property owners, future property renters, future property owners, the community (degraded property), etc.  

An interesting study would be to track the long term economic and financial durability of urban jurisdictions against their proclivity to support rent control.  I suspect that there is indeed such a relationship to the effect that city jurisdictions which strongly support rent control on a sustained and extensive basis also end up with higher crime, worse housing stock, a worse housing market, worse city services, and worse city financial conditions.  

But thats a different study.  This one highlights that there are real and extensive negative consequences to most stakeholders that need to be taken into account against the obvious benefits to the existing renters.