ARTICLE: Rent Control: Can and Should It Be Used to Combat Gentrification?

Jeffrey James Minton *

I. Overview



Historically, rent control has been vehemently opposed by economists. One such economist has gone so far as noting that rent control is "'the most efficient technique known to destroy a city-except for bombing.'" ¹ These economists, however, used neo-classical models to evaluate simple rent control statutes designed only to establish ceiling rents during emergencies. In recent years, spiral theory, a new model of policy analysis, has emerged modifying neo-classical economic assumptions regarding housing markets. Spiral theory recognizes not only basic supply and demand dynamics, but also more sophisticated community dynamics that affect the market, primarily at a local level. In a spiral, the interplay of various market variables, and their causal inter-linkage, may respond to a given stimulus that causes a sustained direction of movement in the market at a greater magnitute than that caused by the initial stimulus.



Gentrification is the movement of more affluent classes into older, previously low income neighborhoods near the central city, thereby converting that neighborhood into higher-priced residential areas. ² Gentrification can be described as an upward spiral with deleterious side effects. ³ Based upon an initial increase in the demand for housing, a gentrifying neighborhood puts continuing pressures on landlords to increase rents for all tenants and attract more upper-income residents. This unfortunately leads to displacement of existing low income residents, the destruction of their







preexisting communities, and a phenomenon called shelter impoverishment. ⁴ This displacement of tenants and destruction of communities, which tends to ...