Newly elected New York City Mayor Zohran Mamdani has promised to “freeze the rent” in response to the city’s high cost of housing. This is simply another term for rent control — a policy enacted in the early and mid-20th century that prevented rents from rising according to market conditions. Despite its surface-level appeal as a way to make housing more affordable, rent control does the opposite.
The reasons are straightforward. Owning rental property is a business. Rent is the source of revenue, while maintenance and repairs are costs. Rent control prevents a landlord’s revenue from rising, but nothing prevents costs from doing so. Inflation raises the cost of labor and building materials. If rent does not rise in tandem, landlords begin to take losses. Like any business, losses cannot be sustained over the long run.
Consequently, landlords end up selling or abandoning their buildings and exiting the market.
Rent control therefore reduces the supply of housing, worsening shortages and making the remaining housing less affordable. Landlords who remain in the market often try to offset the losses imposed by price controls by neglecting basic maintenance. Over time, this leads to deteriorating apartment buildings, blight, and a further reduction in the housing supply.
Rent control also discourages developers from building new housing units. Constructing housing in a major city like New York is extremely expensive. Rent may initially cover costs when a building opens, but if it cannot rise along with expenses, the project quickly becomes unprofitable. Developers, aware of this, shift their focus to building condominiums rather than apartments—making housing even more inaccessible for lower-income residents who would otherwise rent.
History bears this out. Very little new housing was built in New York City during the postwar period when rent controls were in place. Once the rental market was deregulated, housing construction increased as new developments once again became profitable.
Rent control benefits only one group: tenants who live in rent-controlled units whose landlords continue to perform basic maintenance. Because rent control creates shortages, those in rent-controlled apartments rarely move, even if the apartment is larger than they need after their children leave home. This further exacerbates the shortage of available units, especially for lower-income families.
Everyone else is harmed by rent control. Residents struggle to find apartments and are forced to move to neighboring cities with deregulated housing markets, pushing up costs there. Landlords sell or abandon unprofitable buildings, leading to blight. Developers abandon projects that would otherwise have provided new housing, depriving residents of homes and the city of tax revenue.
Higher prices result from reduced supply or increased demand. Rent control does nothing to address either cause—and instead makes both worse. If “freezing the rent” is enacted, expect exactly that outcome: housing will become even more inaccessible to those who need it most.
