Rent control doesn’t work. Boston and high tech companies are not special. The market is what it is regardless of the whims and decrees of men. It’s not entirely clear to me what the fallout will be, but it certainly won’t be good and it certainly won’t be anything like what the developers and city officials intended. If I had to guess, I would say that one of two things happens: either less building happens (developers can’t afford to essentially lose 10% of their rents) or way too much building happens (developers build bigger in order to try to recoup the lost 10%). In the first case, rent controls would do in Boston what they tend to do everywhere – decrease supply. In the second case, rent controls might actually bloat the market and cause too many vacancies resulting in many out-of-business offices.

-JD Cross

 

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