A century ago, the Supreme Court upheld the nation’s first rent control law in Washington, D.C.. A year later, it did the same for New York’s “Emergency Housing Law.” Soon, the Second Circuit Court of Appeals will hear the most significant challenge in decades to New York’s latest version of its rent law.
The first rent control law responded to the housing shortage caused by the return of World War I veterans. A lot has changed. The Great War is over. Most of us have learned that no rent control law, no matter how well-intentioned, has managed to repeal two fundamental laws of economics: the law of supply and demand and the law of unintended consequences. Virtually all economists from across the political spectrum agree that rent control reduces the housing supply and inevitably leads to shortage-induced price increases.
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