Ep 36: Rent Control in India with Sahil Gandhi and Richard Green

Usually, cities with lots of vacant housing have slow rent growth (or low rents), while lower vacancy rates are associated with higher rents. But many Indian cities have an unusual, seemingly paradoxical problem: high vacancy rates and high rents. Why? According to research by Dr. Sahil Gandhi and Professor Richard Green, a major contributor is insecure property rights — specifically, very strict rent control regulations and an inadequate supply of judges to rule in tenant eviction cases. We discuss how policies that increase risk and reduce profits — beyond a certain point, anyway — can lead some landlords to keep their units vacant rather than rent them out, with negative consequences for the entire housing market. We also explore the differences between “first generation” and “second generation” rent controls, and the reasons many cities across the world have shifted from the former to the latter.