A cross-cultural study shows that people are more likely to vote for a policy that hurts the rich, even if it also makes the poor's lives worse. This suggests that resentment toward the wealthy can be a stronger motivator in political decision-making than the desire to improve conditions for the poor.
Price caps can devastate small-time landlords, like retirees dependent on rental income, by setting rent below their costs for taxes and maintenance. This turns the property into a money-losing asset that is impossible to sell, effectively destroying the owner's life savings and retirement plan.
Severe rent freezes can make property maintenance and ownership financially unviable. In extreme cases where an asset becomes a liability, the only way for owners to recoup their investment may be to burn the building down and collect insurance money, a perverse outcome of a well-intentioned policy.
The most effective way to lower housing prices is to increase supply. Instead of artificially freezing rents, which discourages investment, policymakers should remove regulations that make building new units difficult. More construction creates more competition, which naturally drives down prices for everyone.