This is the Cator Daily Podcast for Wednesday, May 15th, 2024. I'm Caleb Brown.

It's an idea that is elegant, simple, and entirely misguided.

Rent control, far from being a housing panacea,

it threatens to make the expansion of affordable housing worse.

Cato's Jeff Myron explains why, in an essay in the new Cato book The War on Prices

available now.

Jeff years ago I worked in public radio as a board operator and I remember one of our news readers at the time suggesting that some

problem associated with housing could be solved by rent control and I remember thinking that this idea was presented as a

wholly fresh idea that no one perhaps had seriously considered and had a lot of upside.

And I thought, well, you know, maybe for people who don't think seriously about the subject,

that's how rent control might look. That is, a price is high. Let's just require that the price be lower.

And that seems to be not an uncommon sentiment quite frankly.

Absolutely.

It's one example of a much broader phenomenon.

To take another standard almost analogous example,

people think that some wages are too low, so we should just mandate that they be higher via

minimum wage laws. But the standard economics response is if you intervene and set some sort of price, whether it's a rent on an

apartment or it's a wage rate for an employee, to something other than what the

market was providing, you can't assume that that's all that happens.

There are going to be further responses by the people affected by this intervention.

Landlords are going to be affected by rent controls, tenants and prospective tenants are going to be affected by rent controls.

Tenants and prospective tenants are going to be affected by the rent controls.

...