Rent Control: Its Rationale and Effects

Abstract

This paper discusses the rationale behind rent control and analyses its effects using a capital theory framework in combination with traditional bid rent analysis. The experience in Hong Kong and Ontario is found to support the author's hypothesis that in addition to the reasons given by other authors, rent control is a substitute for public housing spending and hence is popular among fiscally strained governments. The theoretical discussion confirms earlier findings and additionally provides insight into some of the differential effects on quality and maintenance that have been observed.