Per chatgpt
1. Takings Clause (Fifth Amendment): Rent control and stabilization laws effectively force landlords to provide below-market housing, reducing the economic value of their property without just compensation. By capping rents or limiting rent increases, these laws compel landlords to absorb public costs (affordable housing) privately, constituting an unconstitutional “taking.” Property owners are deprived of their right to derive full economic value from their investment.
2. Due Process Clause (Fourteenth Amendment): These laws also violate substantive due process by being arbitrary and irrational. They interfere with landlords’ fundamental rights to control and manage their property, imposing restrictions on free-market transactions that do not account for economic realities. This is especially unjust when tenants who may not need subsidized housing benefit, reducing landlords’ ability to make reasonable returns on their investments.
Impact on Housing Supply and Demand:
Rent control and stabilization distort the natural balance of supply and demand. By suppressing rent prices, they reduce the incentive for developers to build new rental units and for property owners to maintain or improve existing ones, as they cannot charge market rates. This stagnates housing development, leading to an artificial shortage in the housing supply. Simultaneously, the lower rents encourage tenants to stay in controlled units longer than necessary, further reducing the availability of housing and driving demand higher. Consequently, non-regulated rental units see price hikes due to the decreased availability, exacerbating the housing crisis overall. Rent control thus undermines the market’s ability to respond to growing housing demand, pushing affordability problems onto the general population and new entrants to the rental market.