A new paper estimates that Massachusetts voters’ decision to end rent control added $2 billion to the value of Cambridge, Mass. residential housing stock over 10 years. While some of this represents the improved worth of rental property whose value had been artificially suppressed by the previous law, much of it reflects improvements in the value of other, nearby property that had never been under rent control, as increased rates of renovation and improvement made whole neighborhoods more desirable. “In net, our estimates imply that more than half (55 percent) of the capitalized cost of rent control was borne by owners of never-controlled properties, illustrating both the importance of spillovers in housing markets and the potential unintended side effects of price ceilings.” [David H. Autor, Christopher J. Palmer and Parag A. Pathak, Cato Research Briefs in Economic Policy]
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