Rent control is a property restriction that prevents homeowners from putting their property to its most productive use. Strict rent control policies protect current tenants at the cost of reduced surplus from home buyers, sellers, renters and landlords. Because homebuyers must relinquish certain rental and constructive property rights, the listing price reflects increased ownership/transaction costs. By comparing vacant and occupied San Francisco units’ impact on listing price, a relationship between list price and the costs associated with a tenant-occupied unit. The Kaldor-Hicks Optimality Criteria requires efficient policies to generate a net societal benefit, even if one group benefits as many others lose. By analyzing estimated impacts from each rented or vacant unit, benefit-cost analysts can determine whether society as a whole truly benefits from strict rent control policies.
Available at: http://works.bepress.com/tod_holland/2/