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The Journal of the Trachtenberg School of Public Policy and Public Administration at The George Washington University


A new light rail system threatens to increase pressure on Montgomery County’s already-chronic housing shortage for low- and middle-income residents. The 16-mile Purple Line rail corridor, expected to be completed in 2026, will run adjacent to a substantial proportion of the county’s naturally occurring affordable housing and a large population of vulnerable cost-burdened renters. Proposed economic development around the new transit stations could usher in an increase in economic development that portends rapid increases in home values, rents, and land prices. To preserve affordable housing and reduce displacement in the wake of this development, the Montgomery County Council is debating rent regulations for a county-wide transit-centered buffer zone. This policy, however, would have a negative effect as economists overwhelmingly agree that rent controls cause inefficiency, inequity, negative externalities, disutility, and restricted mobility. This paper uses an economic analysis to show that local rent regulations would fail to mitigate the chronic housing shortage and that costs to communities and businesses will outweigh the benefits provided to protected tenants. Montgomery County should reconsider implementing the proposed rent regulations, reevaluate similar policies, and expand efficient, targeted support for low-income renters.

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