DANIËL ELOFF | Rent control is not a moral debate

Few policy ideas return as reliably, and fail as consistently, as rent control. Be that in New York, Berlin, Stockholm or Cape Town. Whenever housing costs rise in a successful city, the same argument resurfaces that rents are too high, landlords are greedy and the state must intervene to protect tenants.

The proposal is usually framed as a moral imperative, a question of dignity, justice and the right to live in the city and therefore generally advocated for by philosophers and activists in the commentariat. However, this framing is precisely what makes the debate so unproductive. Rent control is not a philosophical question. It is an economic one. And economics, unlike moral intention, is unforgiving of wishful thinking.

At its core the housing problem in cities like Cape Town is brutally simple. Demand has increased faster than supply. More people want to live close to jobs, schools, amenities and safety than there are homes available. That imbalance pushes up prices. Every other explanation is secondary. Yet instead of grappling with scarcity, the debate is repeatedly redirected towards ethics, as if invoking moral language can suspend the laws of supply and demand.

This is not to deny housing has moral dimensions. Shelter and stability matter. But acknowledging the ethical importance of housing does not absolve policymakers from dealing with economic reality. When price controls are imposed on scarce goods, shortages deepen. This is not an ideological claim but a pattern observed across decades, continents and political systems.

There are only two solutions to high rental prices: reduce demand (by making a place less desirable to live) or increase supply (by building vigorously).

Fails everywhere

The most striking thing about the rent control debate is that advocates are unable to point to a single sustained success story. Not one.

New York’s rent-controlled and rent-stabilised stock shrank dramatically over time, while quality deteriorated and access became dependent on luck, inheritance or connections. San Francisco’s strict rent regulation reduced rental supply as landlords converted units or withdrew them from the market.

Berlin’s recent rent cap collapsed under legal challenge after freezing construction and accelerating shortages. Stockholm’s waiting lists for rent-controlled apartments stretch into decades, in effect locking out newcomers altogether.

The pattern is always the same. Rent control benefits a narrow group of insiders who already have housing, while pushing the costs onto outsiders such as young people, migrants and lower-income households trying to enter the city for the first time. It discourages maintenance, reduces new construction and replaces transparent pricing with informal rationing. Rent control doesn’t make housing more affordable, it simply makes it less accessible.

Economists generally do not agree on everything. But on rent control the consensus is unusually strong. That should give pause. When a policy fails everywhere it is tried, the burden of proof lies with proponents. Claiming “this time will be different” requires evidence that the underlying mechanisms have changed. They have not.

Conversely, where rent controls have been loosened or scrapped, as in Argentina’s recent reforms, housing availability has increased rapidly and listings have surged. These outcomes are routinely dismissed as temporary, exceptional or context-specific, with the same rigour never applied to rent control’s far longer and far more consistent record of failure.

Luxury belief

What makes the current debate in South Africa particularly sterile is the insistence on treating rent control as an ethical stance. It is policy romanticism at its peak. It’s the idea that policy can be judged by the purity of its motives rather than the predictability of its consequences. Conversely, those opposing rent control are often accused of lacking compassion or prioritising markets over people. But this misrepresents the objection to rent control. The problem is not that rent control is well intentioned. It is that its intentions do not translate into outcomes.

It ties into the idea that American sociologist Rob Henderson coins “luxury beliefs”. A luxury belief is a view that confers moral status on the person who holds it while imposing its real-world costs on others. Supporting rent control fits this pattern well.

Rent control as policy position is therefore a form of moral displacement. It shifts blame away from systemic failure and onto a visible, politically convenient target.

Those most enthusiastic about rent control are rarely those who will bear its consequences. They tend to be homeowners, long-term tenants or professionals insulated from housing precarity. They already have a place in the city. The people who pay the price are those without leverage, such as new entrants to the market, younger workers, people relocating for opportunity — those without networks or capital. It’s what others have termed “toxic compassion”, the prioritisation of short-term emotional comfort over long-term outcomes.

Rent control often functions this way. It offers emotional satisfaction without demanding engagement with the harder structural failures that drive housing shortages. If we are serious about housing affordability, rent control is a distraction from where the real failures lie.

Real cause

South Africa’s housing crisis is not primarily the result of insufficient regulation of private landlords. It is the product of a state that cannot build social housing or enable house building at scale. National government’s delivery of housing has been slow, inconsistent and chronically under capacity. Public housing projects stall for years. Infrastructure investment lags behind urban growth. Title deeds remain undelivered. Informal settlements expand faster than formal supply.

At the same time, the broader economy has flatlined. Two decades of weak economic growth, policy uncertainty and capital flight have hollowed out the housing construction sector. Housing is capital-intensive. It depends on confidence, long time horizons and predictable returns. No amount of price regulation can compensate for that.

Rent control as policy position is therefore a form of moral displacement. It shifts blame away from systemic failure and onto a visible, politically convenient target. It allows advocates to oppose “the market” rather than confront the far more difficult task of fixing state capacity, reforming land-use regulation, accelerating approvals, investing in bulk infrastructure and growing an economy capable of supporting mass housing construction. None of this is as emotionally satisfying as a rent cap.

This does not mean the status quo is acceptable. Affordability is a genuine and growing concern worldwide for ordinary people, and proponents of the free market should not shrug this off or dismiss it as the inevitable price of urban success. Markets are tools and not moral absolutes, just as rent control is not a moral position but a policy instrument to be judged by its effects.

When they fail to deliver broad access to something as foundational as housing, the response should not be indifference. Governments at all levels in South Africa should focus on expanding supply, reducing the regulatory burden, investing in infrastructure and enabling large-scale construction that lowers costs through abundance rather than scarcity.

The tragedy of the rent control debate is not that people care too much about housing but that they care in the wrong way. Advocates of rent control focus on prices rather than production, morality rather than mechanics, symbolism rather than supply. In doing so they repeat the failures so well documented elsewhere.

The American economist Thomas Sowell famously said: “There are no solutions. There are only trade-offs.” Rent control pretends otherwise. Unfortunately, the result is not a more just housing system, but a tighter, poorer and more exclusionary one — the opposite of what is preached and the exact thing rent control advocates claim to be trying to prevent.

• Eloff, a writer and nonprofit executive, is a legal adviser to the mayor of Cape Town. He writes in his personal capacity.