Rent Control Won't Solve New England's Affordability Crisis. Supply Will.

[Andrew Bosco]

Rent Control Won't Solve New England's Affordability Crisis. Supply Will.

Most agents who ask me how to help their buyers afford New England are asking the wrong question.

They want to know when rates will drop. When prices will soften. Whether there's relief coming.

The answer to those questions is actually downstream of a different problem: New England doesn't have enough housing units. Massachusetts and New Hampshire both rank among the worst states in the country for housing supply. The root cause of unaffordability in this region isn't high rents — it's not enough options.

You can't solve a supply problem from the demand side.

The Misdiagnosis

Rent control is the most popular proposed solution to New England's affordability crisis right now. Massachusetts has a statewide ballot coming in November 2026 — caps rent at 5% or CPI — and it's polling at 60% support.

The appeal is straightforward. People watched rents spike 30% between 2020 and 2021 in markets like Boston and Worcester. Families couldn't afford to stay in neighborhoods they'd lived in for years. The policy response of "stop landlords from raising rents so much" feels like justice.

But rent control treats the symptom. The disease is supply.

And the treatments aren't just ineffective at curing the disease — they often make the symptoms worse on a 5-to-10-year timeline.

What Happens When Investors Exit

When rent caps reduce returns below the threshold that justifies ongoing investment, capital leaves.

Not all at once. Not dramatically. Gradually, over years.

First, maintenance spending gets deferred. The HVAC that needs replacing stays in service another season. The exterior that needed paint gets skipped. The lobby that should have been updated stays dated.

Then renovation stops. The investor who would have done a full renovation of a vacant unit to push rents to market decides it's not worth the capital outlay when the return is capped.

Then units go vacant on purpose — held as options on a future without rent control, or simply because the economics of renting them under the cap are worse than the carrying cost of keeping them empty.

This is exactly what happened in New York City after 2019. Following the strengthening of rent stabilization, roughly 1 in 4 small landlords opted to keep units vacant rather than rent at capped rates, according to reporting from that period. Values on affected multifamily properties fell approximately 30%.

The units existed. The housing didn't.

The Natural Experiment We Already Have

St. Paul, Minnesota implemented rent control.

Within a year, new apartment construction effectively stopped. Nobody builds into a capped market when the return is fixed before the project cash flows.

The city rolled the policy back within a year.

Minneapolis — right next door, same regional economy, same housing pressure — chose a different path. They loosened zoning, simplified permitting, and made it easier to build residential units.

Result: 12% more housing. Rent growth of approximately 1% over the same period.

Same problem. Opposite policy response. Drastically different outcomes.

The American Economic Association's consensus — across a majority of surveyed economists — is that rent control reduces both the quantity and quality of housing. This is one of the areas in economics where the research is unusually consistent regardless of political affiliation.

What the Supply-Side Answer Looks Like

Manchester, New Hampshire is running a real-time experiment.

The University of New Hampshire published research showing that middle housing — two-, three-, and four-family buildings — was actively declining in Manchester. Not stagnating. Declining.

The cause wasn't market demand. Demand for rental units in Manchester has been strong. The cause was a zoning code that made small multifamily impractical to build relative to other development types.

The city's planning board, aldermen, and city leadership rewrote the land use code. Simplified zoning definitions. Cleared the path for smaller multifamily to be permitted and built in residential areas.

This is a supply-side response to a supply-side problem.

The 2027 review will tell whether it worked. If building permits increase, the model expands statewide in New Hampshire. If it works, this becomes a replicable template for other New England cities with the same supply gap.

The Bottom Line

Rent control in the short run genuinely helps the tenants who are already housed. That's not nothing, and I don't dismiss it. People who watched their rent spike $400 a month in 2021 are not wrong to be angry.

But the data from New York, St. Paul, San Francisco, and every other major market that has run this experiment consistently shows the same sequence: investors exit, supply contracts, quality degrades, and rents for new entrants rise.

The affordability problem gets worse. Just on a delay.

The answer isn't to cap the return on housing investment. The answer is to create more housing — which means making it easier to build, not harder to profit. That means zoning reform, simplified permitting, and policy that treats residential construction as the solution it actually is.

Supply solves what price caps can't.