Rent Control's Breaking Point: What New York and Portland Keep Teaching Us
I've spent more than thirty-five years around design, construction, and real estate, and if there's one lesson that keeps proving itself, it's this: you can't regulate your way to affordable housing. Every time a city decides the answer to high rents is to clamp down harder on the people who own and operate rental property, it gets the opposite of what it promised. Rents don't come down. Supply dries up. And the very tenants the rules were written to protect end up with fewer places to live and higher prices to pay for what's left.
I want to be fair about the intention here. Nobody wakes up wanting families priced out of their apartments, and the folks pushing rent caps genuinely believe they're helping. When your rent jumps double digits in a year, a cap sounds like relief. I get it. But good intentions and economic reality are two different animals, and housing doesn't care how noble the motive was.
Here's the mechanism, plain and simple. Owning and running rental housing is a business. Roofs, boilers, insurance, property taxes, labor, fuel — those costs climb every year whether the city lets you raise rent or not. When a regulation caps what you can charge but does nothing about what it costs you to operate, you squeeze the margin from both ends. For a while, owners absorb it. Then they hit a breaking point. And at that point they make a rational decision: stop putting money into the building, or get out of the rental business altogether.
New York is the clearest case study we have. In 2019 the state passed the Housing Stability and Tenant Protection Act, which stripped out most of the ways a landlord could ever recover the cost of fixing up an apartment or bring a unit closer to market rent after a tenant moved out. The result wasn't more affordable housing — it was tens of thousands of apartments sitting empty on purpose. An analysis from Columbia Business School's real-estate center describes exactly what followed: a surge in deferred maintenance and a growing trend of "warehousing" units, apartments owners simply leave vacant because the cost of a code-compliant renovation runs higher than the rent they'd ever be allowed to collect back. Just how many units are offline is debated — the city's own housing survey counted roughly 26,000 rent-stabilized apartments vacant but unavailable to rent, while owner-side estimates run as high as 60,000, or around five percent of the stabilized stock. Either way, that's usable housing sitting dark in the middle of a shortage. Meanwhile, sale prices for buildings full of regulated units have fallen around 34 percent since those 2019 changes, because nobody wants to buy a business that's been engineered to lose money.
Then this summer New York went further. In June 2026, the city's Rent Guidelines Board voted to freeze rents outright — zero percent on both one- and two-year leases for about a million rent-stabilized apartments, the first two-year freeze in the board's history. Freeze the rent, and the math for a small building owner gets brutal: costs keep rising, revenue is locked, and there's no version of that spreadsheet that ends well. Some owners will hang on. Plenty won't. And when they walk, those units don't stay affordable rentals — they get sold off, combined, converted to condos, or turned back into single-family homes. Every one of those exits shrinks the rental pool, and a smaller pool means more people bidding on fewer apartments. That's what actually pushes market rents up.
I don't say any of this to pick on New York, because we're doing a softer version of the same thing right here in the Pacific Northwest. Oregon became the first state in the country to pass statewide rent control with Senate Bill 608 back in 2019, capping annual increases and restricting evictions. In 2023 the legislature tightened it again with SB 611, and for 2026 the allowable increase sits at 9.5 percent. Portland layers its own local rules and relocation-assistance requirements on top of that. And in 2025, lawmakers introduced SB 722, a proposal to shrink the exemption that protects new construction from fifteen years down to seven — which is exactly the kind of regulatory creep that tells a builder or investor the rules can change on them at any moment.
That uncertainty has a cost you can measure. Apartment construction in the Portland metro has fallen to its lowest level in more than a decade — barely 4,375 units under construction at the end of 2024, less than half the ten-year average. Permit times for multifamily projects have run north of 400 days, and the state is estimated to be underbuilt by something like 111,000 units just to catch up with the demand we already have. You cannot cap your way out of a shortage that's fundamentally about not building enough. When you make owning and building rental housing look like a bad bet, you get less of it — and less supply is the one thing that reliably drives rents higher.
Now, in fairness, tenant advocates and some housing researchers push back hard on all this. They'll tell you regulation doesn't cause neglect, that plenty of stabilized buildings are well maintained, and that owners can lean on other resources to weather a freeze. There's real debate there, and I'm not going to pretend the other side has no argument. But I'd point to the pattern. Every major city that has leaned hardest into rent control — New York, San Francisco, and increasingly Portland — has ended up with tighter supply, deferred maintenance, and rents that keep climbing anyway. When the same experiment produces the same result in city after city, that's not bad luck. That's the design working exactly the way economics says it will.
If we actually want housing people can afford, the answer isn't more rules on the folks who provide it. It's building more of it, cutting the permitting drag, and treating rental housing like the essential business it is instead of a villain to be punished. Until we do that, we're just going to keep watching apartments disappear off the market one breaking point at a time — and wondering why the rent keeps going up.