Boston has fourth-highest rents in the country

There isn't some magic eternal spike toward the sky for ever more property speculation profits.

2007/2008 were great proof that prices don't always rise. And a significant aftermath impact was profound reluctance of lenders to write new mortgages for anyone but those with platinum credit.

That's where we still are. So if all these luxurists pump out the dumps til they make an inventory overhang bubble, all bets are off.

You'll be able to see signs. The losers usually start with a bunch of incentive like deposit waivers, free toaster ovens, no rent for two months and so on. These are the easy concessions.

But if the dumps are still stiffs, panic will eventually set in. And there is considerable residential building going on out in the burbs. My home town of Reading looks like it jammed large housing complexes in the old Addison Wesley tract and along the border with Wilmington.

I saw more of the same along 95 a few days ago in the Danvers/Peabody area.

The snob towns and aspiring snob towns may sand bag these kinds of projects but other towns see it as a niche to exploit.

There could be another wave of urban flight from Boston if costs get unacceptable. I generally see the region as a coherent whole rather than a bunch of fiefdoms with varying levels of brag status.

And if others adopt that outlook, the allure of Boston takes a hit.

When there are X housing units and Y people wanting to live in them, and Y>X, the wealthy wind up getting those units and the poor wind up having to leave.

Always. Rent control doesn't change that.

With rent control, you get money under the table, connections, et cetera, driving the process. At best, you've slowed it down. Without rent control, at least the wealthy have to part with more money to get the units, and the high rents spur construction of more units. W

NYC still has it and it badly distorts the rental market. People don't move if they have a cheap rent reducing turnover of units. Landlords can't make money and defer maintenance. Investment in new rental housing construction stagnates making it so that the underlying problem of limited supply not meeting demand is not solved but made exponentially worse.

The massive arson rings in Boston in the 1970s and 80s were the result of rent control. People could make more money on insurance fraud than being land lords because of prices locked in before double digit inflation hit.

https://www.youtube.com/watch?v=oJvTTGOHFkU

Rent control was a disaster. Landlords were not able to re-invest in their buildings to upgrade or do needed maintenance leading to deterioration of the housing stock. It also put downward pressure on supply as there was less of an incentive to invest in building new apartments and more of an incentive to cash out and turn condo. Tenants would stay put for years so as to not to lose their below-market apartments, thus cutting off the supply of more affordable apartments coming on the market. Rent control was not income based, so you had many well-off individuals living in below-market apartments instead of the lower-income people that needed them. Rent control is not the answer, the answer is more apartment-friendly zoning, including in the suburbs.

Paul Krugman wrote a piece about 15 years ago that covers a lot of the ground on rent control.

http://www.nytimes.com/2000/06/07/opinion/reckonings-a-rent-affair.html

The analysis of rent control is among the best-understood issues in all of economics, and -- among economists, anyway -- one of the least controversial. In 1992 a poll of the American Economic Association found 93 percent of its members agreeing that ''a ceiling on rents reduces the quality and quantity of housing.'' Almost every freshman-level textbook contains a case study on rent control, using its known adverse side effects to illustrate the principles of supply and demand. Sky-high rents on uncontrolled apartments, because desperate renters have nowhere to go -- and the absence of new apartment construction, despite those high rents, because landlords fear that controls will be extended? Predictable. Bitter relations between tenants and landlords, with an arms race between ever-more ingenious strategies to force tenants out -- what yesterday's article oddly described as ''free-market horror stories'' -- and constantly proliferating regulations designed to block those strategies? Predictable.

When Bill Weld was governor he and his "brain trust" which included Charlie Baker got a ballot measure on the ballot to abolish rent control. Even though only Cambridge (and maybe Boston) had it, the whole state was allowed to vote. That's when rents in Cambridge skyrocketed and longtime residents were pushed out. Merino only tried to get rent control for seniors, not all residents. Highways (except 90) may be free, but if you want to live here your going to pay, so people move further and further from their jobs and drive or take the commuter rail further and further. On the flip side, landlords are a lot richer and more apartments have been upgraded to granite countertops and stainless steel appliances.

1) Non rent-controlled properties will escalate in price even faster, creating a wider disparity
2) Rent-controlled apartments generally become rapidly less maintained
3) New, generally younger/poorer renters will be the ones most punished
4) Less overall development because investors must content with uncertainty, which means what is built will more likely be higher-priced if something may be controlled in the future
5) Situations like in SF where entire buildings get evicted to get around certain things being under the control
6) Inefficient allocation -> people will tend to stay put rather than take opportunity to find something that may suit them more (eg, single old lady hangs on to large apartment b/c she’d have to go small for more $ if she moved, but then a family that could really use the space can’t get it)

Its a policy which results in outcomes completly opposed to its intent, and MA was very smart to ban it, because it is one of the primary reasons NY and SF are so distorted today pricing wise and so quickly deteriorating, and a policy opposed almost unanimously by economists across the spectrum.

Generally a good synopsis if you want a longer read: http://www.econlib.org/library/Enc/RentControl.html

The solution to our problems are generally that we need to change restrictions on development/NIMBYism, and change laws that do things like mandate expensive parking in the units in an age where car ownership is rapidly declining.