Rent Regulation for the 21st Century: Pairing Anti-Gouging with Targeted Subsidies

A central purpose of rent regulation is to provide stability against unexpected increases in rent. Low-income renters are especially vulnerable to rent shocks. Most rent regulation systems, however, confer the largest benefits on higher-income renters, prompting the question of how rent regulation can offer more effective protection to lower-income households. Expanding rent regulation to impose tighter rent restrictions on more of the housing stock has adverse consequences for housing markets; meanwhile, means testing rent-regulated housing would be highly burdensome and potentially counterproductive. In this brief, we argue that pairing anti-gouging rent regulation with shallow, targeted subsidies to low-income renters is a better way to ensure that the benefits of rent regulation reach vulnerable households.