Housing Assistance and Labor Supply: The Case of Rent Control

Rental housing in urban areas across the U.S. has become increasingly unaffordable. In response, legislative momentum for rent control has grown, restricting rent growth in many local municipalities. Although economists generally oppose such regulations for distorting the housing market and creating significant efficiency costs, activists argue that they promote stability, equality, and social justice. Existing research on rent control has focused primarily on its direct effect on housing; little is known about potential spillover effects on tenant outcomes. Recognizing the close link between housing and labor markets, this project investigates whether rent control influences tenant labor supply, using high-quality micro-data on rent stabilization in New York City and employing rigorous statistical methods. Specifically, we ask: Does rent control increase tenants’ labor supply by fostering residential stability? Or does it reduce labor supply through an implicit rent subsidy (an income effect)? Which demographic groups of tenants are most affected? Answers to these questions will inform both the effectiveness and equity of rent control policies and deepen our understanding of how housing assistance shapes labor market outcomes more broadly.