Rent Control Analysis Ignored Positive Effects of Free Market on Housing Stock
Stacey Blau's analysis of the impact of rent control on MIT students ("Loss of Rent Control Will Affect Housing," December 13, 1994) is misleading and contains obvious logical errors. By Blau's own facts, only 15 percent of MIT students presently live in rent-controlled apartments, and these apartments are "difficult to find" because they are "rarely advertised" and "mostly discovered by word of mouth." Hence, the loss of rent control and subsequent rent increases in previously rent-controlled apartments will have a direct impact on only a small segment of MIT graduate students, and will have all but no effect on incoming graduate students.
But what about the indirect impact on the local housing stock, now that a block of previously inaccessible housing will become part of a free market economy? If anything, the existence of more housing stock will put downward pressure on non-rent-controlled housing prices. I would expect prices of housing stock appropriate for student use to fall as the market adjusts to a sudden increase in available supply.
Finally, Blau quotes a graduate student, Heinrich J. Schwarz G, who is worried about even a 5 percent increase to his $475 per month rent. Let me suggest looking to the open market for relief. I have found a number of different non-rent-controlled living situations over the past eight years around the MIT campus, and never paid more than $400 per month for rent.
Fred G Martin '86
Postdoctoral Fellow, Media Laboratory