Who Suffers as a Result of Rent Control?

In large cities, you often run into areas that are subject to rent control. As a result of rent control, certain groups of people are helped by it, and others are hurt. There are two main groups that are hurt by rent control in a particular area. 

Potential Renters

New renters that are willing to move in and pay a premium to find a place to live are hurt by rent control. When there are only so many apartments, those that were lucky enough to be in the apartments when rent control started do not want to leave. Therefore, those that do not have an apartment yet are usually hurt by rent control policies.

Owners and Developers

The owners and developers of apartments are also hurt by these policies. Once they fill up their existing units, they really have no financial incentive to build more properties for more people. They can not make any money on a new property so therefore, they really do not have a reason to build anymore. This eliminates the need for competition because no one can build high-end properties. Everything is going to be the same rent regardless of what happens, so developers are basically discouraged to build more property as a result. 

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