Rent control is a set of regulations that cap the price landlords may charge for rental housing. On The Bob Zadek Show, attorney Bob Zadek and his guests have examined rent control as an economic price ceiling, a constitutional question under the Takings Clause, and a political problem whose beneficiaries are concentrated while its costs are spread across the public.
Definition and economic effects
Trevor Burrus, described by Zadek as a research fellow at the Cato Institute’s Robert A. Levy Center for Constitutional Studies and editor-in-chief of the Cato Supreme Court Review, defined rent control as a price ceiling: rules that keep “the price below a level via some formula that it would be—at a lower than it would be in a market situation.” He noted that the regulations vary by locality, with New York City having “the most famous and now onerous rent control laws,” including rules about which units are covered and formulas limiting annual increases, such as 2% a year. Escaping the Statrix: Trevor Burrus’s Rent Control Red Pill (2021)
Burrus described two consequences of a price ceiling: tenants consume more of the product than they would at a higher price, and suppliers produce less. Landlords have less incentive to build rental properties and less incentive to maintain existing ones, so housing stock “continually sort of gets taken out of the market because they’ve become dilapidated.” He offered the example of two struggling actors in New York City who might share a one-room flat but, if rent control caps rent at $700 a month, each decides to get their own place—assuming they can find one. Getting a rent-controlled apartment, Burrus said, becomes a matter of being “first person to find it, first person to get in line, or pay some sort of maybe under-the-table payment.” Escaping the Statrix: Trevor Burrus’s Rent Control Red Pill (2021)
Burrus attributed to an economist the observation that “if you want to destroy a city’s housing stock, short of bombing, rent control is one of the best ways of doing it.” He cited Sweden in the 1970s, which had “very onerous rent control laws” and was “building houses faster than any country has ever built” yet still had a housing shortage because people took up too much housing under the artificial price ceiling. Escaping the Statrix: Trevor Burrus’s Rent Control Red Pill (2021)
Mike Munger, in a later episode, made a similar point about San Francisco and New York. He said there is “a shortage of housing in San Francisco because of rent control” and that “New York has a terrible shortage of housing because of rent control.” He argued it is “literally impossible to run out of anything as long as the price mechanism is free to adjust,” and that shortages appear when the price mechanism is prevented from adjusting. The ‘Broken Window Fallacy’ is Back (2023)
Maintenance and housing quality
Zadek asked how landlords respond when told they cannot charge what their apartments are worth. Burrus answered that landlords “don’t maintain the basic core of the properties,” do not keep appliances up to date, and do only the minimum required by statute or lease. They will not improve the property because they cannot capture the benefit: if a landlord could charge $200 more for hardwood floors, new doors, or double-paned windows, the investment might make sense, but under rent control it does not. Over time, the housing stock declines because basic maintenance is not done. Escaping the Statrix: Trevor Burrus’s Rent Control Red Pill (2021)
The “emergency” justification
Zadek traced rent control’s modern origins to the end of World War II, when returning GIs created sudden demand for housing in the New York metropolitan area and New York City enacted emergency legislation. He noted that the emergency “will outlive” the GIs and that rent control remains “more vibrant than ever.” Escaping the Statrix: Trevor Burrus’s Rent Control Red Pill (2021)
Burrus said the first real rent control laws came during World War I, and he cited Block v. Hirsh in 1921, a case that “very narrowly scraped by a constitutional challenge.” A few years later, the case returned to the Supreme Court, which ruled that the emergency had expired and struck down the laws. Burrus described this as “one of the only times” the Supreme Court has said that if a legislature claims an emergency, “it has to actually be an emergency.” He contrasted that with New York City’s practice of reauthorizing its rent control emergency about every three years. Escaping the Statrix: Trevor Burrus’s Rent Control Red Pill (2021)
Rent control as a wealth transfer
Zadek characterized rent control as a wealth transfer from the owner of real property to the renter, analogous to price gouging statutes: “It is simply a statute that says A must transfer value to B.” Escaping the Statrix: Trevor Burrus’s Rent Control Red Pill (2021)
Burrus connected this to the Takings Clause, which he said provides that private property cannot be taken except for public use and with just compensation. The purpose of the clause, he argued, is to stop politicians from saying, “We need to provide better housing for people as a collective,” and then making a landlord subsidize that goal. He gave the hypothetical of “Dan the landowner” being forced to lose money so that the government can claim to care about fair housing. Burrus said Justice Scalia at one point explained that the purpose of the Takings Clause is to prevent the onus from being placed on one person or group of landowners that all of us are supposedly supposed to bear together. Politicians prefer this arrangement, Burrus said, because it lets them avoid raising taxes and avoid compensating landlords. Escaping the Statrix: Trevor Burrus’s Rent Control Red Pill (2021)
Beneficiaries and political persistence
Burrus said that if you get a rent-controlled apartment, you “absolutely benefit from rent control,” which makes the laws difficult to repeal. He estimated that perhaps 500,000 people in New York have a rent-controlled apartment and are “very, very interested in maintaining” it. He described this as a “concentrated benefits, diffused cost question.” He noted that New York’s laws allow apartments to be transferred to family members and others, keeping them at controlled rents “in perpetuity.” Escaping the Statrix: Trevor Burrus’s Rent Control Red Pill (2021)
Burrus compared rent control to the minimum wage: those who get a wage hike are visible beneficiaries, while “the ones who don’t get a job” are not seen. Similarly, under rent control, “the people you can’t see are the ones who don’t get an apartment.” Escaping the Statrix: Trevor Burrus’s Rent Control Red Pill (2021)
Zadek argued that rent control lacks a means test: it does not limit protection to people with less money but benefits whoever gets there first. Burrus agreed, saying apartments are distributed “based on some principle of time and luckiness. It’s like a lottery.” He contrasted rent control with federal housing subsidies and vouchers that “go directly to people who demonstrate need.” Escaping the Statrix: Trevor Burrus’s Rent Control Red Pill (2021)
Burrus also addressed the “best case” for rent control: the argument that unequal bargaining power between landlords and tenants justifies intervention, because moving is difficult and landlords can squeeze tenants. He said this is “not actually I think what is the case in bargaining power,” though he acknowledged it is hard to move and landlords can take advantage of that. Zadek challenged the premise, saying unequal bargaining power is “kind of fake” because the overall market and demand dictate value, and a landlord who charges above market will have no takers. Escaping the Statrix: Trevor Burrus’s Rent Control Red Pill (2021)
Burrus offered an analogy to “Free Ice Cream Cone Day,” which he said is really “pay with your time for an ice cream cone” day because of the long line. The distribution principle becomes people’s time rather than money, privileging those with free time over those who must work. He said the same principle applies to rent control: the money price is replaced by time and luck, and “we’re not distributing these apartments on the basis of need or merit.” Escaping the Statrix: Trevor Burrus’s Rent Control Red Pill (2021)
Across episodes
Two episodes touch on rent control. In the 2021 episode, Trevor Burrus and Bob Zadek examined rent control as a price ceiling, a Takings Clause question, and a political economy problem, with extended discussion of Block v. Hirsh, the emergency justification, and the wealth-transfer framing. In the 2023 episode, Mike Munger mentioned rent control briefly as an example of a price ceiling that produces shortages in San Francisco and New York, in the context of a broader discussion about regulation, tort liability, and the price mechanism. The excerpts show no development or change in the argument between the episodes; Munger’s treatment is consistent with Burrus’s but does not engage the constitutional or political-economy themes.
What the sources do not cover
The excerpts do not state the outcome of any modern rent control case, the name of any bill or ordinance, or which amendment the Takings Clause appears in. They do not provide the current number of rent-controlled units in any city, the details of any state or local law beyond the general formulas Burrus describes, or the names of the economists whose observations Burrus and Munger invoke. The excerpts also do not cover rent control outside New York City, San Francisco, and Sweden, or any empirical study measuring its effects.