- “Poof! Multifamily building permits have almost entirely evaporated in one of the nation’s most affluent areas — Montgomery County, MD.” – Jay Parsons
Multifamily building permits in Montgomery County, Maryland, have nearly vanished in the year after the county adopted rent control, raising fresh questions about how far such policies can go without choking off new housing supply.
Using state permitting data, housing analyst Jay Parsons found that from January through August 2024, before rent control took effect in July, Montgomery County issued building permits for 2,093 multifamily homes. During the same period, all other Maryland counties combined issued 2,274 multifamily permits.
In the first eight months of 2025, Parsons said, the picture flipped. Montgomery County issued only 54 multifamily permits, while the rest of Maryland stayed roughly level at 2,248 permits.
Parsons framed the shift bluntly.
“Poof! Multifamily building permits have almost entirely evaporated in one of the nation’s most affluent areas — Montgomery County, MD,” he wrote, arguing that “there’s one clear driver… Rent control.”
According to Parsons, “Montgomery County plunged, while the rest of Maryland held steady — leaving little doubt that rent control crushed MoCo’s development pipeline.”
He noted that the county did exempt new construction from rent control, but only for 23 years, and said that limitation is out of step with how long-term investors think about apartment buildings and resale values. In his view, the looming expiration date makes properties less attractive to future buyers, reducing values and discouraging new projects.
Parsons also linked Montgomery County’s experience to St. Paul, Minnesota, which enacted rent control in 2021 and, he argued, “left itself on the sidelines of the nation’s biggest apartment development boom in a half century.”
The Montgomery County numbers arrive amid a long-running national debate over whether rent control can protect tenants without suppressing new construction.
Economists and housing researchers have been studying the question for decades, and the evidence points in both directions.
A 2019 study by Stanford economist Rebecca Diamond and co-authors on San Francisco’s 1994 rent control expansion found that the policy produced large benefits for tenants who were covered and reduced their risk of displacement, but also led many landlords to convert rental units to condos or owner-occupied housing.
The authors reported that “landlords treated by rent control reduce rental housing supplies by 15 percent,” and concluded that the resulting loss of supply likely pushed overall market rents higher over time.
Earlier work on Cambridge, Massachusetts, looked at what happened when strict rent control was abolished in the mid-1990s.
Economists David Autor, Christopher Palmer and Parag Pathak found that ending rent control triggered significant new investment in housing and large gains in property values, both in formerly controlled units and in nearby buildings, suggesting that the earlier regime had discouraged maintenance and reinvestment.
At the same time, a growing body of research documents meaningful benefits for tenants who live in regulated units.
An Urban Institute review of rent control literature noted that “most broadly, the key goal of rent-control laws is to maintain existing affordable housing,” and summarized evidence from San Francisco, New York and Cambridge showing that rent regulations lowered rents for covered households compared with similar homes without controls.
The same review highlighted studies finding that tenants in rent-controlled homes move much less frequently than those in market-rate housing, suggesting that rent control can act as a buffer against displacement caused by rising prices.
A 2025 literature survey from the D.C. Policy Center reached similar conclusions about tenant stability.
It reported that the longer a household remains in a rent-controlled home, the larger the discount compared with market rents, and found that this effect is especially strong for older residents and people of color.
The report noted that, by lowering housing costs, rent control “allows tenants to allocate more of their income to non-housing needs, effectively increasing their disposable income.”
Not all research finds large negative supply effects.
The Urban Institute review pointed to a study of several New Jersey cities with relatively weak rent control rules—systems that exempt new construction and guarantee annual rent increases—which “found no significant decreases in rent relative to cities without rent control.”
The authors suggested that the design of policies, and the flexibility they give landlords to cover costs, may explain why some jurisdictions see fewer side effects.
More recent international work underscores that design matters.
A 2024 survey of global rent control studies by economist Konstantin Kholodilin concluded that rent control consistently improves affordability and stability for tenants in regulated homes but also tends to generate “multiple other effects,” including reduced construction of new rental housing, conversion of rentals to other uses and misallocation of who occupies scarce units.
New research on California cities also points to mixed outcomes.
A 2025 study evaluating “rent control intensity” across the state found that jurisdictions with stricter rent regulations tended to have slightly higher median rents and higher shares of cost-burdened renters overall, even as incumbent tenants in stabilized units benefited from lower and more predictable rents.
Taken together, the Montgomery County experience and the broader research suggest that rent control almost certainly trades off some level of new supply and investment in exchange for stability and lower rents for people fortunate enough to obtain regulated units.
How sharp that trade-off is appears to depend on how strict the laws are, whether new construction is permanently exempt and whether governments pair rent regulation with aggressive efforts to add housing.
Parsons believes the lesson is clear. He called rent control “bad policy proven (by countless academic research studies) to be backfire on the very people it’s intended to protect,” and argued that “the best, most effective and most proven solution: Build, build, build.”
For now, Montgomery County offers an early natural experiment: one county with new rent control and sharply reduced multifamily permitting, surrounded by a state where building continues at roughly the same pace.
Whether policymakers elsewhere see it as a warning or a challenge to design smarter, less disruptive regulations may shape the next round of fights over rent control.
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How’s it working in San Francisco? How about New York?
Also, why is “additional supply” needed, in regard to EXISTING residents? Why is “additional supply” the goal in regard to whether or not it’s working for existing residents?
Isn’t the underlying sentiment here yet another example of a failure to establish an ultimate size of a given city? In other words, endless growth?
Also, for fans of “additional supply” (endless growth), one might look at more than one year’s worth of data. Based on the data above, it appears that there could have been a “last-minute rush” to apply for permits in the example above. How many were applied for during the previous 5 years for example, in regard to a comparison of the two examples?
Also, how many have actually started construction? (The answer to that might also indicate if this was a last-minute rush.)
It is interesting that no one ever seems to bring up all of the other tenant protections (e.g., increasingly-restrictive eviction protection measures) in regard to the impact on permits.
Ron O
Rent control is generally imposed in cities with growing economies that attract outside demand from job seekers. The growth of those cities has little if anything to do with birth rates or population growth. So raising the issue of birth rates is irrelevant and nonsensical.
There are many other studies on how other rental rules impact housing supply and rent levels. I’ve posted some of those here in the past. You can start with work by Ed Glaeser: https://www.newyorkfed.org/medialibrary/media/research/epr/03v09n2/0306glae.pdf
“Rent control is generally imposed in cities with growing economies that attract outside demand from job seekers. The growth of those cities has little if anything to do with birth rates or population growth. So raising the issue of birth rates is irrelevant and nonsensical.”
I didn’t raise the issue of birth rates, here.
But the question I raised is essentially whether or not cities/communities should necessarily be pursuing a growing economy that attracts non-resident job seekers (from other places) in the first place. When, exactly, is “enough” enough – especially if a given community is not necessarily on board with that unstated goal?
For that matter, wouldn’t that question apply to current resident renters, who aren’t necessarily benefiting from a “growing economy”? Do you think they are necessarily on board with economic development which prices them out?
Do you think this is related to the reason that actual tenant advocacy groups overwhelmingly support rent control?
“The same review highlighted studies finding that tenants in rent-controlled homes move much less frequently than those in market-rate housing, suggesting that rent control can act as a buffer against displacement caused by rising prices.”
The Cambridge study in particular showed that upper middle income households were the prime beneficiaries because they move less frequently. It did not help lower income households. That points out the importance of delving more deeply into study results before drawing key conclusions.
All of the studies consistently show that rent control helps only a small portion of renters who need the assistance as a large cost to both are tenants who are seeking cost effective housing and even first time home buyers who face increased housing prices due to reduced supply.
Makes zero sense, as in none whatsoever.
Current resident renters OVERWHELMINGLY support rent control – particularly in regard to lower income renter advocacy groups.
Also has absolutely nothing to do with “for sale” housing, except perhaps to keep THOSE prices in check as well. I’ve seen an example in my own family where the rent paid is LESS THAN property tax that most new homeowners pay – even in Davis. Do you think my family member was out shopping for houses in such a scenario?
In any case, I think you should present whatever study you’re referring to, to tenant advocacy groups. Again, those groups SUPPORT rent control – for obvious reasons. They’re already aware of studies promoted by growth advocates, and have soundly rejected them.
Current renters support rent control for the same reason that current homeowners support Prop 13–they are receiving benefits that come at a cost to everyone else, and also exacerbate the problem that the solution was supposed to solve. Both of these actions INCREASE housing prices as shown by these studies. What seems like a simple solution is instead so simplistic that they make things worse. We all know that we shouldn’t eat ultraprocessed foods but we continue to do so and we have excessive obesity as a result. Just because something has public support doesn’t mean that its the correct answer to the problem.
How naive–of course rent control directly impacts house prices. Houses can be used for either renting or sale. Half of rentals in Davis are single family or duplex houses. These studies show that less rentals are built with rent control which means that housing supplies for rent are pulled out of the for sale supply.
The tenancy advocacy groups are well aware of these studies–I don’t need to present them. But the evidence is now becoming overwhelming that rent control doesn’t work to actually benefit tenants. It’s the cotton candy of solutions that gives a short sugar high and then a headache afterwards.
“Current renters support rent control for the same reason that current homeowners support Prop 13–they are receiving benefits that come at a cost to everyone else, and also exacerbate the problem that the solution was supposed to solve.”
Who, exactly, is “everyone else”? You’re apparently referring to non-residents (those who make a choice to move TO a given area). That’s the group you’re concerned about? People who aren’t even current residents in the first place?
Also, there are studies which arrive at conclusions which are opposite to yours, and I’ve previously posted them on here. (Would have to search for them again, at this point.)
“These studies show that less rentals are built with rent control which means that housing supplies for rent are pulled out of the for sale supply.”
So you’re stating that there’s less for-sale housing for sale in that scenario (but not necessarily an increase in prices), and an increase in supply of “for rent” housing. O.K.
“The tenancy advocacy groups are well aware of these studies–I don’t need to present them. But the evidence is now becoming overwhelming that rent control doesn’t work to actually benefit tenants. It’s the cotton candy of solutions that gives a short sugar high and then a headache afterwards.”
Pretty sure that a lot of tenant advocacy groups would find that type of commenting insulting and condescending. Why do you believe you are qualified or welcome to speak on behalf of others who disagree with you in the first place?
If you want to know what ACTUAL tenants are concerned about, here’s a recent PBS program which provides the answer (as well as the massive property tax breaks for years, that end up costing the city millions in support of gentrifying residential towers in NYC). Again, literal tax breaks for billionaires.
https://www.pbs.org/video/slumlord-millionaire-3sgi7g/
And you guys are worried about some poor schmuck saving a few bucks off his/her rent in regard to future increases?
The corporate YIMBYs are on the OPPOSITE SIDE of tenant advocacy groups. The YIMBYs are literally getting PAID by the interests which support growth and gentrification!
How dumb does one have to be to not see what’s going on?
Yes, tenants are being screwed by wealthy landlords in too many places. Trump’s father made his fortune of this situation. The problem is that rent control is NOT the answer–it just makes it worse. Increasing rental supply is the most direct solution–good old Father Guido Sarducci solution. But there are probably other better solutions, like increasing Section 8 vouchers. These studies show that most of the beneficiaries of rent control don’t need the assistance–that was clear in the Cambridge study. The question is how to better target the benefits to those who need it. (We don’t need perfection, but we do need avoid subsidizing the upper middle income households.)
Where’s your evidence about YIMBY support? (Tim Redmond doesn’t count because I’ve seen way too many errors from him.) Where can I get my check for advocacy? I’m missing out.
Why would I mention Tim Redmond, since he’s the OPPOSITE of a YIMBY?
In any case, here’s some evidence that I found within 30 seconds of looking. YIMBYs were OPPOSED to this rent control measure. Pretty sure I can find more (not to mention their “silence” on the issue in general). It is not in their interest to support measures which conflict with the business interests which support their existence in the first place.
Interestingly-enough, the California Democratic Party SUPPORTED this measure, unlike the YIMBY groups. Seems refreshing, since there’s been plenty of other examples
https://calmatters.org/politics/2024/11/california-election-results-prop-33-rent-control/
And by the way, if you’re going to slam someone like Tim Redmond, provide some evidence. You already don’t have enough credibility yourself to be making that type of comment.
I don’t think you read Richard’s comment regarding Tim Redmond correctly