"Standard economic theory is that rent control does not work, because if you force rents down, landlords may decide not to rent out their properties, which reduces the amount of rental property available."
If that's the main problem, then why not simply combine rent control with a big tax on properties rental that remain vacant for too long?
"Researchers also found that the controls helped accelerate gentrification, because some landlords demolished their older properties in favour of new-builds, which were exempt from the limits."
It's in the interests of landlords to let their properties, and the number of vacant properties in London is minimal.
Rent control does not work because it decreases supply and increases demand (so the exact opposite of what a working solution should do!). Your suggestions would only make these effects worse.
In the end, rent control is a gift to most well-off tenants at the expense or everyone else.
1) taxing vacant properties: Vancouver started this, although with the intent of keeping out foreign riff raff. Eg, there may be loopholes for the longtime BC residents who just happen to own a second condo. It will be interesting to see how that plays out over time.
2) then you won’t get any new builds being built. Especially combined with all the regulations on minimum parking sizes, %age of below market units, if you add on permanent rent control, you may well tip over into the point where no developer will risk building because any project is guaranteed to be a loss.
I'm not sure what the rule of thumb is for commercial builders, but for real estate investors, a good deal is that 1 months rent = 1% of the price. So.. yeah, I dunno if there's actually that much wiggle room.
It may work if it's a nation-wide policy. But let's say you enact this policy in one city and I'm an investor. What's to stop me from just deploying my capital elsewhere?
If that's the main problem, then why not simply combine rent control with a big tax on properties rental that remain vacant for too long?
"Researchers also found that the controls helped accelerate gentrification, because some landlords demolished their older properties in favour of new-builds, which were exempt from the limits."
So don't exempt new-builds from rent control.