For more than five years, reporters and the real estate industry continue to cite a seriously flawed and misleading study on rent control by Stanford University researchers. At the same time, reporters almost never mention studies by experts at USC, UCLA, and UC Berkeley that found rent control is a key tool to stabilize the housing affordability crisis. What’s going on here? To set the record straight, here are the top five flaws of the Stanford paper, along with key points from the USC, UCLA, and UC Berkeley studies.
In 2018, Housing Is A Human Right meticulously analyzed a rent control study by Stanford professors Rebecca Diamond and Tim McQuade. We released an executive summary of our detailed findings that same year, concluding that the Stanford report was “seriously flawed and biased in favor of Wall Street landlords in both their framing and deceptive packaging of results.” For more background on Diamond and McQuade and their study, read the 2018 Housing Is A Human Right article “Stanford Study on San Francisco Rent Control is Flawed and Misleading.”
The executive summary laid out five key flaws of the Stanford study, which should make any journalist or policymaker think twice about holding up the paper as proof that rent control doesn’t work. Read the executive summary for further analysis about the top five flaws.
Flaw #1: “The claim that rent control increased gentrification in San Francisco is extremely misleading and totally overblown, and ignores the loopholes in the laws that allow condo conversions.”
Flaw #2: “The study’s conclusions about rent control increasing the costs to other tenants are based on a seriously skewed dataset with limited applicability to the total housing stock in San Francisco and to other cities as well.”
Flaw #3: “The study vastly underestimates the benefits of rent control by excluding tenants that moved into their rent-controlled units after 1994, and by only studying up until 2012.”
Flaw #4: “The first two versions of the study (from September and October 2017) were deceptively packaged to bury positive conclusions found about rent control that don’t fit within the authors’ agenda. These are the versions that got the most [media] attention.”
Flaw #5: “The authors have released three different versions of the study, manipulating their mathematical models in each one to make rent control look worse.”
These significant findings clearly unfurl a big red flag for reporters and policymakers, especially the constant manipulation of mathematical models. So much so, if journalists insist on citing the Stanford study, then they should also mention the major flaws that have been laid out in the Housing Is A Human Right executive summary.
At the same time, while reporters and policymakers are quick to hold up the Stanford study, they hardly ever mention pro-rent control studies by top researchers at USC, UCLA, and UC Berkeley. This is especially alarming when it comes to the media: if a journalist cites an anti-control rent control study, balanced coverage demands the inclusion of a pro-rent control study.
Housing Is A Human Right has published a concise summary of the USC, UCLA, and UC Berkeley studies for reporters, policymakers, and the public. The reports by prominent universities found that rent control is a key tool to quickly stabilize a housing affordability crisis and prevents people from falling into homelessness.
Importantly, USC also found that rent regulations have “minimal impact on new constructions” – the real estate industry always says, without citing research, that rent control will prevent more housing from being built. And UC Berkeley noted that claims that “rent control has negative effects on development of new housing are generally not supported by research.” That report added that “rent control can provide a timely solution [to a housing affordability crisis] that the market will not.”
In the end, USC, UC Berkeley, and UCLA found that rent control works. Reporters and policymakers in California and across the country should make use of these key studies as a national rent control movement continues its momentum and tenants in major cities demand rent caps to address the housing affordability and homelessness crises.