Rent Control Rationing, Community Composition, and Residential Segregation*

This paper considers the effects of rent control on community socioeconomic composition. In particular, do rent controls increase the presence of poor and minority residents in a locale? Theoretically, the effect of rent controls on community composition depends on a tradeoff between lower prices which might favor the disadvantaged and a landlord imposed rationing mechanism which likely does not. Using data on Cambridge, Massachusetts and adjacent census tracts straddling the state imposed end of rent controls, I find evidence that rent control increased the presence of minority residents but also decreased the proportion of poor residents. I also find despite its positive impact on minority membership, rent control is associated with an increase in traditional measures of residential segregation. *This paper version was prepared for the 2009 AEA Annual Meetings in San Francisco, CA. This is still a work in progress. I would like to thank Christopher J. Palmer for superb research assistance. Remaining errors are the author’s sole responsibility.