IEA Says Mayor of London’s Rent Controls Are Not The Solution
A spokesman for the Institute of Economic Affairs has slammed Sadiq Khan’s latest rent control proposals, saying they are unlikely to resolve London’s housing crisis and called for a boost in private sector supply instead.
In a statement released yesterday, IEA Editorial Director Kristian Niemietz said:
“For years, Sadiq Khan has been lobbying successive governments to give him the powers to introduce rent controls in London. Previous Conservative governments have refused to give him those powers, and so far, it looks as if he will have no such luck under a Labour government either. For good reason: there are around 200 studies on the effects of rent controls, and the vast majority of them conclude that rent control does more harm than good.
“It now looks as if Khan is trying to save face by just calling something “rent control”. What he is proposing is not a rent control in the conventional sense: it is a new type of public housing, and for public housing, rent levels are politically determined anyway.
“While far less bad than conventional rent controls, it is not much of a solution either. London needs a massive private sector-led supply-side boost, a reenactment of the great housing boom of the 1930s – not special government housing projects for politically favoured groups.”
About the IEA
The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems. The IEA is a registered educational charity and independent of all political parties.
