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Rent Control Sounds Appealing. The Data Shows It Fails. – Emilio DiSpirito
by Emilio DiSpirito, License Partner and Private Office Advisor, Engel & Völkers, contributing writer
Rent control is often presented as a solution during times of rising housing costs. It is politically attractive because it offers a simple sound bite for a complex problem. But history shows that rent control is not an effective housing policy. It is divisive, it restricts supply, and it is repeatedly used by politicians as a platform for votes rather than outcomes.
Housing affordability is a serious issue. It deserves serious solutions. Rent control has been studied, implemented, repealed, and studied again for decades. The conclusion remains consistent. It does not solve the problem it claims to address.
Much of my understanding of this issue has been shaped by conversations on The Wealth Architect Podcast, which I host. In particular, an in depth interview with Shannon Weinstein of RentProv, an active member of the Rhode Island Coalition of Housing Providers, provided clear insight into how rent control policies affect housing at an operational level. I have also gained perspective through conversations with Greg Rice, manager of Nexus Property Management, who brings a macro level understanding of property operations, financing considerations, and how policy uncertainty influences long term investment decisions across the industry.
As someone who represents buyers and sellers across Rhode Island, I see the downstream effects of housing policy long before they show up in headlines. Housing markets are sensitive systems. When incentives are distorted, capital moves elsewhere, construction slows, and supply tightens. When supply tightens, prices rise.
Rent Control Reduces Housing Supply
Rent control discourages the creation and preservation of housing. When rental income is capped, property owners lose both the financial ability and incentive to reinvest in their buildings. Developers faced with regulatory uncertainty choose to build in markets where long term returns can be projected with confidence.
National data consistently shows that housing providers reduce or halt investment in rent controlled markets and that builders avoid constructing new housing in jurisdictions where rent control exists or is being considered. The result is fewer new units, deferred maintenance, and a shrinking supply of housing.
This is particularly relevant in Rhode Island, where more than eighty percent of the housing stock is older. These properties require continuous reinvestment to remain safe and functional. Policies that restrict reinvestment do not protect affordability. They accelerate deterioration.
The Cambridge Case Study
We do not need theory to understand the impact of rent control. We have real world evidence.
In Cambridge, rent control was in place for decades. During that period, rental housing supply declined, property values fell dramatically, and reinvestment slowed. When rent control was repealed in 1994, construction and renovation permits more than doubled and remained elevated for over a decade.
That outcome was not accidental. It was the direct result of removing policies that suppressed supply.
Who Actually Benefits
Rent control is often framed as a tool to help low income households. In practice, it frequently benefits higher income tenants who secure controlled units and remain in them long term. Lower income families face reduced availability, longer wait times, and fewer choices.
Because controlled units rarely turn over, market mobility declines. Families who need housing cannot access it. The system becomes less flexible and less equitable while appearing politically popular.
The Cost to Homeowners and Cities
Rent control does not only affect rental properties. When property values decline, municipal tax revenue declines with them. Since cities and towns rely heavily on real estate taxes to fund schools, infrastructure, public safety, and essential services, that lost revenue must be recovered elsewhere.
In most cases, the burden shifts to owner occupied homes. Homeowners who have no involvement in rental policy absorb higher taxes or reduced services. This consequence is rarely discussed publicly but is widely felt.
Why New Construction Exemptions Do Not Work
Supporters of rent control often argue that exempting new construction solves the problem. In reality, it does not.
Financing decisions are made based on entire jurisdictions, not individual buildings. Lenders and investors price risk based on policy environment. Even exempt projects are affected by distorted market rents, reduced comparable values, and uncertainty about future rule changes. As a result, construction still slows and capital flows elsewhere.
Housing supply suffers regardless.
What Actually Works
If the goal is affordability, the solution is increasing housing supply.
Communities that stabilize housing costs do so by encouraging new construction, streamlining permitting and approvals, allowing density where infrastructure already exists, supporting reinvestment in older housing stock, and providing targeted assistance to those who genuinely need it.
When more homes are built, competition increases. When competition increases, prices stabilize. This relationship holds across markets and economic cycles.
Political Platforms Do Not Build Housing
Housing policy should be judged by results, not rhetoric. Rent control has repeatedly failed to deliver affordability and has consistently produced negative outcomes for housing supply, property values, and community stability.
If Rhode Island wants real solutions, it must move past divisive talking points and focus on policies that expand housing. Homes are built by investment, confidence, and long term planning. They are not built by slogans.
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About the Author
Emilio DiSpirito is a Private Office Advisor, License Partner of Engel & Völkers Oceanside, developer, investor, and host of The Wealth Architect Podcast. Ranked in the top 1% globally at Engel & Völkers with over 1,500 families served and $750M+ in closed sales, Emilio is also the featured real estate expert for WPRI’s The Roadshow and a contributor to RINewsToday.com. Recent interview on WPRI’s the Rhode Show about this topic can be seen here: https://www.wpri.com/video/welcoming-emilio-dispirito-from-the-dispirito-team-at-engel-v%C3%B6lkers-the-rhode-show/
Let’s talk about senior homelessness, due to high cost of rent. That is going to be my reality before the summer. I am looking into making my car a house.
As Dispirito wrote, the solution is not rent control. It is not lack of rent control that is the problem; it is lack of sufficient housing. Create incentives for more housing by the methods Dispirito described and that problem is solved. It is short-sighted and narrow minded to think that rent control will help. The data demonstrates that the solutions he described work.
The little I recall (many moons ago ….) from some public financial coursework with this topic is – Rent control can help some tenants in the short term, but most research shows it tends to reduce housing supply and raise rents for everyone else over time. It’s “workable” only under very specific conditions and usually performs best when paired with major increases in housing construction. Then we can fathom with factoring in rental vouchers, zoning reform, housing costs, etc. -Obviously, not the easiest topic to apply, but honest, fair, balanced and realistic policy debates could be helpful. ‘peace’
rent control fails but so does lack of rent control. We don’t get enough housing built because no matter where, there are objectors by those who have housing to new housing near them, for understandable reasons – it shifts supply-demand against them and it dds to congestion, litter, noise in their neighborhood. The rest – unaffordable housing for many, high housing prices that keep new businesses out, more homelessness…..Modern predatory capitalism is making it worse by private capital buying up houses to rent them short-term for maximum profit, even buying up mobile home parks to take resources out….