
Rent-control policies likely 'fueled' SF gentrification, Stanford economists say - MilnerRoute
http://www.sfgate.com/bayarea/article/Rent-control-in-San-Francisco-likely-spurred-12330161.php
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wahern
Ah, more economists making predictions based on very general theory without
bothering to validate against the empirical evidence.

Here's an awesome article posted on HN last year, where the author laboriously
compiled advertised rental rates going back to 1948.

[https://experimental-
geography.blogspot.com/2016/05/employme...](https://experimental-
geography.blogspot.com/2016/05/employment-construction-and-cost-of-san.html)

His data clearly shows that the long-term rate of increase in rents continued
unchanged after rent control was imposed in 1979. It's basically been steady
since the mid 1950s. Year-to-year variations are best explained by variations
in income and number of employed persons.

Moreover, growth in housing stock didn't appreciably drop after rent control.
It has slowed slightly since the 1960s but it would be hard to pin that all on
rent control as the regulatory environment has become much more strict.

EDIT: Here's a more succinct conclusion from someone who tried to reproduce
the results from the same data:

    
    
      Using those methods and Mr. Fischer's data, we find that
      median rents in San Francisco are best predicted by average
      per capita annual income and total employment. We further
      find that there *IS NOT sufficient evidence that total
      housing unit inventory has a significant effect on the
      median rent in San Francisco*.
    

[http://moreuseful.blogspot.com/2016/05/another-look-at-
facto...](http://moreuseful.blogspot.com/2016/05/another-look-at-factors-
driving-rents.html)

EDIT EDIT: The Stanford authors did use Fischer's data for median rents. See
page 10.

~~~
pzone
Ah, more amateur data analysts running a few time series regressions and
thinking they're doing economics. Check out the big warning at the bottom of
the moreuseful.com post with a very forthcoming "We have not established
causality!"

The entire crux of Diamond, McQuade and Qian is that there was a pseudorandom
assignment of rent control benefits to certain tenants but not others in the
1994 law. They use this variation to identify their models. This gives them a
defensible causal story: here are two similar groups, with and without rent
control, we'll study how their behavior differs.

You can see all this starting in section 4 of their paper.

