Doesn’t rent control fall into the same category of trying to defy free markets. The common wisdom on that is: If landlords aren’t allowed to charge high market rents, then nobody will build or develop any apartments for rent, leading really to a shortage down the road, with even higher prices for the overall system. I think we all agree that there is nothing wrong with the current system of a free market. I think we don’t blame people paying more for a place in San Diego than somewhere in the Mid-west, or that prices will rise when people are moving to places where the land area is small. What we do complain is that the government does interfere with free markets, by fostering speculation (Home-ownership Society), subsidizing loans/removing risk (Fannie Mae), Prop. 13 (subsidizing the status quo), forcing interest rates down to 1% (less than the rate of inflation), exempting capital gains when lived in for two years. These are all mechanisms that blow up prices artificially in the short-term, but do nothing long-term, since they are either reversed (interest rates) or at least reach a new plateau from which new incentives would be needed.
