Philippine urban planner Urbano dela Cruz has states the obvious on rent control, though it’s unlikely the politicians will listen:

If there is a third rail in Philippine politics, it is rent control. The law has been extended countless times (the latest incarnation is RA 9341 which extends RA 9161) and though each time the law is passed or extended and sunset date is set, it is nevertheless predictable that it will be extended or renewed next time the law is set to lapse.

Arroyo, who has a Ph.D. in economics, must KNOW about the damaging effects of rent control and so I DO NOT UNDERSTAND why she approved the current extension. Or why anyone who took some basic economics in college (i.e. -our lawmakers and policy wonks) would approve of it. -Apart from it being POLITICALLY UNTOUCHABLE.

I am by no means neo-liberal in my economics but the left and right sides of the spectrum of economic thinking (from the chicago school/washington consensus to socialists and the welfare state architects of northern europe) agree on the destructive effects of rent control. It distorts not only the market but damages the built environment itself:

“…rent control diverts new investment, which would otherwise have gone to rental housing, toward other, greener pastures—greener in terms of consumer need. They have demonstrated that it leads to housing deterioration, to fewer repairs and less maintenance. For example, Paul Niebanck reports that 29 percent of rent-controlled housing in the United States is deteriorated, but only 8 percent of the uncontrolled units are in such a state of disrepair. Joel Brenner and Herbert Franklin cite similar statistics for England and France.” (Walter Block, 1990)

Assar Lindbeck, whom I quote above, is a socialist. Paul Krugman has this to say:

“The analysis of rent control is among the best-understood issues in all of economics, and — among economists, anyway — one of the least controversial. In 1992 a poll of the American Economic Association found 93 percent of its members agreeing that “a ceiling on rents reduces the quality and quantity of housing.” Almost every freshman-level textbook contains a case study on rent control, using its known adverse side effects to illustrate the principles of supply and demand.”

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