[icelancer]

No, not exactly. In the scenario above, the landlord obviously has to keep the property vacant for some time at $5000/month, much longer than at $3000/month. But because it is a near-certainty the real price would go to $5000/month in 5 years - but he is unable to increase rent to that if he rents out today at $3000/month due to rent control (and this is critical) - he would rather keep it vacant until someone comes along and pays the higher amount.

If not for rent control, he would charge $3000/month now at market-clearing rates, get a tenant in there in 30 days, and increase rent by the standard market price every 12 months. But due to rent control undercutting profits, he can't do this, so he keeps it open at a higher price.

[linkregister]

I was going to refute your (uncited) comment, but it appears that San Francisco's vacancy rate has increased from 4.9% to 8.3% over ten years, affirming your position.

http://www.bayareacensus.ca.gov/counties/SanFranciscoCounty....

[icelancer]

There's really no citation available so to speak for my comment, unless you want citations in Economics texts. It's fairly rational activity by landlords (or anyone who has controlled supply of any good/service) to take. The vacancy rates aren't surprising to me but there are other effects that cause that number to rise/fall, not just rent control (though the arrow is in the expected direction based on policy).

[kelnos]

It's unclear from those stats the reason for the vacancies, though. I've read about a lot of foreign investment that is buying up properties and then intentionally leaving them vacant, or are using them as vacation homes or vacation rentals.

[learc83]

>and increase rent by the standard market price every 12 month

That's not what he would do. Tenants tend to value a property more as time goes on. Beyond increasing market rates.

Without rent control, your rent will increase faster than the average market increase would indicate unless you move very often. Rent control may not be the optimal way to combat this, but it is something many societies recognize as a problem.

[kelnos]

In a place with higher supply and less demand, I'd absolutely agree with you, but in SF, that property will get snapped up within a week regardless of whether it's listed at $3k or $5k.