Rent Controls Work — but They Aren’t a Silver Bullet
Rent controls can help to make housing more affordable in cities like New York. But they must be part of a broader solution to the housing crisis that involves increasing density and building more housing.
Supporters hold signs at a rally for Zohran Mamdani in Brooklyn, New York, on May 4, 2025. (Madison Swart / Hans Lucas / AFP via Getty Images)
Following Zohran Mamdani’s victory in the Democratic primary for mayor of New York, Harvard economist, former Treasury secretary, and serial policymaking failure Larry Summers took to Twitter/X to denounce Mamdani’s campaign pledge to freeze the rent for rent-stabilized tenants: “Rent control is the second-best way to destroy a city, after bombing,” he said. His remarks were seized upon by the usual cast of self-styled wonks and pundits looking for more reasons to denounce Mamdani’s victory as a danger to the city.
While Summers presented the rent-control-as-bombing line as his own witticism (a disturbing one, one might add, given several cities around the world are currently suffering immensely under bombing attacks), it’s actually an old economics cliché, first uttered by Swedish economist Assar Lindbeck. It’s often found in the same section of introductory economics textbooks as warnings about the dangers of raising the minimum wage.
Zohran vs. Econ 101
Introductory economic theory predicts that imposing a price ceiling on any market, including housing, will reduce supply by preventing the price from rising to the level that would prevail in an open market. As Summers argues, rent controls cause “under investment in repairing, maintaining, constructing new apartments,” which, he asserts, “is likely to exacerbate rather than improve issues around housing affordability in New York.”
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